Tanker prices continue to rise due to disruptions in trading patterns, tight slots, strong demand and low newbuilding deliveries, making it a win-win situation for both shipowners and shipyards.
The latest Clarkson data shows that current price of a newbuild of a very large crude carrier (VLCC) is $128 million. This means that the cost of building a new VLCC is about 50% higher now than it was in 2020.
Geopolitical factors are the main reason for strong demand in the tanker industry. Western sanctions against Russia have cut off Russia’s fossil energy sources from accessing European energy markets. As a result, Russian exports that would have been in the Baltic and Black Seas must now be shipped to more distant buyers such as India or China, which would normally require transshipment through the Suez Canal and Red Sea. But due to Houthi attacks on shipping, the Suez Canal and Red Sea routes are no longer preferred. More tankers are now choosing to bypass the Cape of Good Hope, which means the route will be extended even further.
In parallel, the size of the tanker fleet has remained constant despite the gradual increase in voyage demand. The tanker market has seen a low order book in recent years, with only one VLCC delivery in 2024 and low deliveries in 2025. The resulting pattern of supply and demand bodes well for the rising value of the tanker second-hand market, which is now a seller’s market.
Resale prices for eight-year-old VLCCs have already exceeded the price of new vessels back in 2016, according to recent news of deals in the second-hand ship market. Four years ago, the market price of a 5-year old VLCC was about $70 million, while the current price of a used vessel of the same age is close to $110 million. Over the same period, prices for both 10- and 15-year-old VLCCs have risen by about 67 percent.
Rising prices are a positive sign for Asian shipyards, which take most of the world’s newbuilding orders. Prices for newbuild tankers have risen by about 50 percent since the end of 2020. Despite, the increased cost of investment in newbuildings, tanker owners have opted to place orders for newbuildings due to the surge in demand. Currently, the global VLCC newbuilding order book is less than 3% of the existing fleet, and the potential delivery schedule for VLCCs from 2027 onwards will face competition from other shipping markets. Meanwhile, the VLCC fleet is aging rapidly, with nearly 50% of the world’s VLCCs expected to be more than 15 years old by the end of 2026, and more than 20% of VLCCs expected to be more than 20 years old.
In mid-February, Magni Partners, a UK company owned by Norwegian shipowner Tor Olav Troim, announced an additional order for two 320,000 dwt LNG dual-fuel VLCCs from New Times Shipbuilding. at the end of February, Greek shipowner Samos Steamship announced that it had ordered one 300,000 dwt VLCC from JMU. Recently, tanker giant DHT Holdings announced the signing of 4+4 320,000 dwt environmentally friendly VLCCs at Korean shipyards, with the average price of the first four vessels at $128.5 million, the highest current VLCC construction price.
In addition, there are no more VLCC newbuilding slots left for 2027 at Chinese and Korean shipyards, encouraging shipowners to place orders with “less distinguished” shipyards in the tanker construction field. In the past few days,, Trafigura, one of the world’s largest metal and mineral traders, placed an order for two VLCCs with Jiangsu New Hantong Ship Heavy Industry Co., Ltd (NHT), which is not only the first time for Trafigura to place an order for VLCCs as a shipowner, but also a major breakthrough for the shipyard.
As of the beginning of this year, the order book for Suezmax and Aframax/LR2 tankers accounted for 9.9% and 12.7% of the existing fleet, respectively, according to the data. In the Suezmax tanker market, the more noteworthy order was placed by Dynacom Tankers Management, a tanker shipping company owned by Greek shipowner George Procopiou. Dynacom Tankers has placed an order for 10 Suezmax tankers with New Times Shipbuilding.
In early January, Pertamina’s shipping subsidiary, Pertamina International Shipping (PIS), also ordered 15 MR product tankers from South Korea’s Hyundai Mipo Shipbuilding.
In addition to the shipyards mentioned above, Chinese shipyards such as Guangzhou Shipbuilding International, CSSC Chengxi Shipyard, COSCO SHIPPING Heavy Industry (Zhoushan), CMJL Yangzhou, Southeast Shipbuilding and other shipyards, as well as South Korea’s DH Shipbuilding, Hyundai Saho Heavy Industry and other shipyards, have all received new orders for tankers.