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It now costs more than $1 million per day to rent a supertanker on the world’s most important oil route. Charter rates for very large crude carriers, the floating behemoths that move roughly 2 million barrels of oil each, surged to $1.035 million per day on the benchmark Middle East Gulf-to-China route on September 14, according to Baltic Exchange data. The culprit: a severe shortage of vessels willing or able to transit the Strait of Hormuz, the narrow chokepoint between Iran and Oman where a significant share of the world’s seaborne oil passes through.
A strait in crisis
About 20 miles wide at its narrowest point, the Strait of Hormuz is the bottleneck connecting Persian Gulf oil producers to the rest of the world. Before the current conflict between the US and Iran escalated around late February 2026, approximately 125 vessels transited the strait daily. Military action, blockades, and elevated security risks have since turned the shipping lane into something closer to a gauntlet.
Earlier in 2026, VLCC rates had already climbed to as high as $650,000 per day during periods of escalating tension. At various points throughout the year, daily earnings for these vessels exceeded $480,000 during calmer stretches. The $1 million threshold represents a market that has run out of easy alternatives.
The shuttle tanker workaround
One increasingly common approach involves a two-vessel relay system. Smaller shuttle tankers carry crude oil through the Strait of Hormuz itself, transferring their cargo to larger VLCCs waiting in safer waters outside the conflict zone. The workaround has kept some oil flowing but hasn’t meaningfully relieved the pressure on rates.
Non-Hormuz shipping lanes have recorded rates of approximately $644,000 per day, themselves well above historical norms. The Ukraine conflict continues to compound the problem, as sanctions, insurance complications, and shadow fleet dynamics have already removed a meaningful number of vessels from normal commercial service.
Who benefits from the chaos
South Korea’s Sinokor Group has emerged as a prominent player capitalizing on the elevated rate environment, deploying ships into high-rate opportunities. Building new supertankers takes roughly two to three years from order to delivery, so the supply response to today’s rate spike won’t arrive until long after the current crisis either resolves or becomes the new normal.
High refining margins have sustained demand for crude imports despite the ballooning transport costs.
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