Tanker freight rates have strengthened sharply, drawing new investors into the global shipping industry.

The Iran conflict has highlighted how geopolitical crises can sharply compress the available supply of vessels.

Very large crude carriers (VLCCs), the backbone of the oil tanker fleet, have seen average daily earnings soar nearly 20-fold this year.

Turmoil in the Middle East has also spread to smaller and mid-sized tankers and other vessel types, allowing shipowners to charge higher freight rates and enjoy rising asset values.

Financial investors are now piling into the sector.

The Wave Tanker Shipping ETF, which tracks freight futures, has surged an astonishing 3,700% this year.

At a shipping finance forum held in Singapore this week, shipowners, brokers, bankers and lawyers broadly agreed that the market has not yet peaked.

The global economic and geopolitical environment has not been this turbulent in decades.

In addition, shipping companies are sitting on ample cash, allowing them to optimize their balance sheets and further boosting their appeal to investors.

Philip Clausius, managing partner at maritime finance advisory firm Transport Capital, said: "Friction will persist over the long term, only its intensity will wax and wane, but the situation can no longer be reversed. This is clearly a broad positive for the shipping industry."

Abhishek Pandey, global head of transportation finance at Standard Chartered Bank, cited industry data saying the global fleet is expected to earn more than US$300 billion this year, compared with about US$200 billion in 2025.

He said interest from family offices, private credit and equity investors in positioning for the sector continues to rise.

The Middle East's critical role in energy supply has made crude oil tankers the focus of the market.

Data from Veson Nautical shows that one-year charter rates for VLCCs have nearly tripled year on year to almost US$150,000 per day, driving vessel prices sharply higher.

Shipowners are prioritizing vessels that can be put into service immediately, with some older VLCCs selling for even more than newbuilds.

Matthew Freeman, vice president of valuation and analytics at Veson, said a nearly brand-new supertanker recently changed hands at a record price of US$200 million.

Some attendees at the Singapore conference believe secondhand vessel prices could continue to climb in the coming weeks.

One concern lingers in the market: a shipbuilding boom could depress freight rates several years from now.

Major shipyards were already fully booked before the war, and the current rally has spawned a large wave of new vessel orders.

Freeman said VLCCs under construction account for 38% of the existing fleet, compared with only 14% a year earlier.