The cost of shipping crude oil by sea has hit a record. The Breakwave Tanker Shipping ETF (NYSE: BWET), which tracks tanker freight futures, closed Thursday at $1,012.75.

It ended 2025 at $19.26. That is a gain of 5,157%.

Meanwhile, nine of 13 U.S.-listed tanker stocks have more than doubled this year. For comparison, the SPDR S&P 500 ETF Trust (NYSE: SPY) is up 13.5%.

So why have tanker stocks gained so much less than the freight rates that drive their profits?

Why Tanker Freight Rates Hit a Record

A very large crude carrier, or VLCC, is a supertanker that carries about 2 million barrels of oil.

At the start of the year, a VLCC sailing from the Middle East to Asia earned around $30,000 a day, according to shipbroker Poten & Partners.

The rate has since reached $1.3 million a day, the firm said in its Tanker Opinion of Oct. 2.

That is 43 times as much.

Per barrel, the cost rose from $1.73 to almost $33. Freight now equals 27% of the delivered cost of the crude, up from 3% in January, according to Poten.

For this reason, its price follows expected freight rates directly.

"VLCC rates have reached unprecedented levels and are now at $1.3 million per day (43 times the January number). This is equivalent to almost $33/barrel, or 27% of the delivered cost of crude oil."

— Ed Finley–Richardson (@ed_fin) October 3, 2026

The mechanism works in steps. First, the war with Iran disrupted traffic through the Strait of Hormuz. Iran has targeted nine vessels there in recent days, according to United Kingdom Maritime Trade Operations data cited by Barchart.

As a result, owners demand more money to send ships into the Gulf.

In addition, voyages are getting longer.

Frontline plc (NYSE: FRO) said it expects average VLCC voyage length to stay elevated as Asian buyers source crude more widely.

Longer voyages keep each ship busy longer. As a result, fewer ships are available to take new cargoes, and rates rise.

“The entire energy complex is being challenged,” creating inefficiencies that support tanker utilization, Frontline CEO Lars H. Barstad said in the company’s second-quarter results release.

9 Tanker Stocks That Have More Than Doubled

Source: TradingView.

Why Tanker Stocks Trail the Freight Rally

BWET does not own ships. Instead, it holds freight futures with an average maturity of about 50 to 70 days, and roughly 90% of them are tied to VLCC rates.

For this reason, its price closely tracks expected freight rates.

By contrast, shipowners book vessels weeks in advance, and some lease them at fixed rates for a year or more.

Frontline shows the gap. The company reported a record second-quarter profit of $659.2 million.

Yet its VLCCs earned an average of $152,700 per day that quarter. For the third quarter, Frontline had booked 86% of its VLCC days at $156,900 a day.

Both figures are a fraction of the current spot rate.

The gap suggests investors continue to value these companies on the profits they expect over several years, not on this month’s freight rate.

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