WAs the US and Iran violated the ceasefire again this week, the shipping market reacted sharply, resuming its upward trend within days as risk premiums around the Strait of Hormuz returned. The Dirty Baltic Tanker Index and the record Gulf to China (TD3C) VLCC route in the Middle East rose during the week. However, this week the focus is shifting beyond short-term freight rate movements to the exceptional pace of new VLCC orders recorded during the first half of 2026.
Executive summary
• Breaking the 2008 record in one half-year: Thanks to the strong contracting activity observed during the first half of 2026, the crude oil tanker order book exceeded the historical high of 2008, exceeding 600 dirty tankers.
• VLCCs dominate the order cycle: This unprecedented volume is largely driven by the VLCC segment, which represents 78% of orders contracted in the first half of 2026. This contrasts sharply with the previous major wave in 2006, which saw orders evenly distributed across VLCC, Suezmax and Aframax sizes.
• • Used premiums boost demand for new construction: Strong used asset prices continue to support deals, as buyers pay premiums for immediate availability and 5-year resale values reach $174.5 million, well above the new build price of $129.8 million.
• Geopolitical risks support investment sentiment: The size and timing of the wave of orders coincided with a multi-month Strait of Hormuz risk premium, while a renewed collapse of the ceasefire pushed freight rates up again.
Shipping Market – Dirty Prices Rise as Hormuz Risk Renews
The weekly shipping reaction confirms the sensitivity of dirty tanker rates to the renewed risks of Hormuz. As of July 8, the TD3C (Middle East, Gulf, China) index stood at 343 points, up 7.1% on the day and 16.8% on the week after recovering from a recent low of 294 points on July 1. TD3C reached 501 points on June 23, six days after Islamabad signed a memorandum of understanding on June 17 that set a 60-day framework for ending hostilities and restoring navigation through the Strait of Hormuz. Despite the agreement, freight rates continued to reflect high geopolitical uncertainty before declining as confidence in implementation gradually improved. The renewed escalation this week has interrupted this easing trend.
The Baltic Oil Tanker Index (BDTI) rose to 1,939, up 4.0% on a weekly basis. The index remains 107.4% higher than its level a year ago, indicating that shipping markets continue to price a significant geopolitical risk premium amid continued uncertainty in the Gulf region.
VLCCs dominate ordering activity – and comparison with 2006 peak
The isolation of the VLCC sector shows that the contraction rose to 204 units in the first half of 2026, a level much higher than the lean years between 2011 and 2022. A comparison with 2007 – the last great wave of new construction – is instructive. In 2006, activity was almost evenly distributed among the three major crude oil volumes: Suezmax (57), VLCC (48), and Aframax/LR2 (44).
Construction Site – China dominates crude oil tanker calling activity
Of the 261 crude oil tankers ordered, 216 ships (83%) were laid up in Chinese shipyards, compared to 38 ships (15%) in South Korean yards and only 3 ships (1%) in Japan.
At the level of the total order book, China represents 72% of the ships and 75% of the dwt on order, compared to 13% of the ships and 20% of the dwt for South Korea, while Japan represents 1% of the ships and 3% of the dwt.
Push – Traditional push is regaining momentum
Traditional payment has reasserted its dominance in the current demand cycle. Only 2% of crude tanker orders placed during the first half of 2026 specified the use of alternative fuels, exclusively LNG, compared to 12% during all of 2025. While the numbers are not directly comparable because 2026 only covers the period from January to June, 98% of first-half 2026 orders were placed with conventional engines, indicating a strong preference for conventional propulsion. However, across the current order book, adoption of alternative fuels varies by ship class, accounting for 31% of Aframax/LR2 orders, 18% of Suezmax orders and 12% of VLCC orders, indicating that uptake has remained limited in the largest crude carriers.
Delivery schedule — 2028 marks the peak of the pipeline
The delivery schedule is aggressive over the next three years, with volumes increasing steadily through 2027 before reaching a peak of 78 ships in Q4 2028, the busiest quarter in the current order book. The increase in late 2028 was largely driven by VLCCs (49.60% of total deliveries), while Suezmax deliveries are estimated to be more limited (23.30% of total). After peaking in Q4 2028, quarterly deliveries fell to 43 ships in Q1 2029, 36 in Q2, 41 in Q3 and 26 in Q4, before falling to just 13 ships in Q1 2030 and single-digit quarterly levels thereafter.
Evolution of the order book – the record was broken in 2008
The order book reflects the size of the current investment cycle. Contracting during the first half of 2026 brought the crude oil tanker order book to more than 600 vessels, surpassing the previous peak recorded in 2008 with half the year remaining. The expansion has been largely concentrated in the VLCC segment, which now accounts for the largest share of the order book and has led the increase in contracting since the market bottomed in 2022-2023.
Asset Prices – VLCC value trend remains the same
The latest valuation data extends a trend highlighted in the 19-week Tanker Market Monitor, where VLCC asset prices were already moving well above newbuild prices, and the age discount curve was narrowing. This trend remains intact. Across the VLCC age curve, values continue to advance, with the strongest annual increases concentrated in the oldest tonnage. Five-year-old VLCCs are now worth $174.5 million, compared to a new build price of $129.8 million, with buyers continuing to pay a premium for immediate availability. With values strengthening across all age groups, the asset price environment continues to support the record pace of VLCC orders.
Key takeaways
The first half of 2026 has already set a new benchmark for crude oil tanker contracting. With 261 orders placed, this period represents the strongest order performance ever in six months, bringing the crude oil tanker order book to above its previous historical peak. The contract volume recorded in just six months exceeds the peak record of previous orders achieved during the full order cycle. Recent shipping developments have provided a supportive backdrop to the market. Following renewed US-Iran tensions this week, dirty tanker freight rates rose after correcting from their highs in late June, highlighting continued market sensitivity to developments in the Strait of Hormuz.
Source: Al Ishara Group. https://www.thesignalgroup.com/weekly-market-monitor/weekly-tanker-market-monitor-week-28-2026
