US-Iran Conflict Lifts Long-Haul Crude Demand as VLCC Orders Reach 217 in 2026

As the US-Iran conflict reshapes trade routes and drives demand for long-haul crude transportation, global orders for very large crude carriers have exceeded 20 billion US dollars. So far in 2026, shipowners have ordered 217 VLCCs, compared with 93 ordered in all of 2025. Each VLCC costs about 130 million US dollars to build and can carry roughly 2 million barrels of crude. With the Strait of Hormuz blocked, refiners in Asia and Europe need to fill the supply gap.

The trade flow of crude shipped long-distance from the Atlantic Basin to Asia continues, with buyers seeking purchases outside the Middle East to secure supply chains. US crude exports have hit record highs, and other Atlantic Basin suppliers are also raising output. After Saudi Arabia's east-west pipeline was damaged in an Iranian attack, the kingdom's cost of transporting crude using VLCCs reached an all-time high. VLCC freight rates climbed from about 132,000 US dollars per day in February, before the war broke out, to more than 500,000 US dollars per day.

After years of crisis and overcapacity, about 20% of the current VLCC fleet is more than 20 years old, which has driven newbuilding orders higher. Moving oil out of the Gulf region and transshipping it to other destinations not only ties up vessels but also increases waiting times, further stoking demand for ships. Recently signed contracts include vessels scheduled for delivery in 2029 and 2030. Older VLCCs have also found buyers rather than being scrapped. These vessels bolster the "shadow fleet" used to transport oil from sanctioned countries such as Russia, Iran and Venezuela, and are excluded from mainstream Western shipping and insurance systems.