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# A Fifteen Year Old Ship Is Worth More Than a New One
- URL: https://the-capital-memo.ghost.io/a-fifteen-year-old-ship-is-worth-more-than-a-new-one/
- Published: 2026-10-07T09:53:03.000Z
- Updated: 2026-10-07T09:53:09.000Z
- Author: James Coleman

The Baltic Exchange's average earnings figure for very large crude carriers was 722,946 dollars a day on the eighteenth of September. A year earlier it was 79,700\. The progression through this year runs 198,000 dollars in July, 272,000 in August, about 449,000 in early September and then that number, with one assessed route printing above a million dollars a day in the last week of the month.  
  
For scale, the same class of ship earned an average of 47,200 dollars a day last year on Frontline's realised figures, and 43,400 the year before.  
  
None of this is demand. Clarksons has crude tanker capacity growing 2.4 percent this year against cargo demand growing half a percent. It is distance and it is risk. Traffic around the Cape of Good Hope has doubled since February, a detour of some five thousand miles that adds up to a fortnight and over a million dollars of fuel to a voyage, and war risk premiums for Gulf transits went from a tenth of a percent of hull value per week before the conflict to around two and a half percent at the March peak, settling near one percent by the end of that month.

### The Historical Echo

Shipping has run this exact experiment before, at greater length, and the ending is the part owners forget.  
  
The Suez Canal closed on the sixth of June 1967 and did not reopen until the fifth of June 1975\. Afterwards everything went round Africa, and the industry responded by building ships too large to ever use the canal again. The supertanker fleet grew from under two million tons in 1966 to over fifty million by 1970\. By the middle of 1974 the tanker fleet stood at 238 million deadweight tons with a further 699 supertankers under construction or on order.  
  
Then the orderbook arrived into a market that had changed underneath it. Deliveries set records of 41.8 million tons in 1974 and 44.8 million in 1975, just as the Yom Kippur War and the embargo that followed destroyed transport demand. Freight rates more than halved in 1974.  
  
By the end of 1975, 573 ships were laid up, 47.8 million deadweight tons of capacity, and the detail that matters is that 160 of them, 25.8 million tons, were under seven years old. It was not the old ships that sat idle. It was the ones ordered at the top.

### Where Patient Capital Is Positioning

The asset prices have moved further than the earnings, which is the usual warning.  
  
A five year old very large carrier went from 145 million dollars in mid July to about 172 million by mid September. A ten year old went from 115 to 152 million. A fifteen year old went from 83.5 to 135 million, up sixty one percent in nine weeks and ninety percent over the year for twenty year old tonnage. A new ship ordered today at a Korean yard costs about 135 million dollars and arrives in 2028 at the earliest. So a ten year old hull now prices above a newbuilding for the first time on record, and a fifteen year old is worth what a new one costs.  
  
The supply picture that justifies this is real. Around 130 are now over twenty years old against fewer than twenty five years ago, and roughly 927 tankers sit under sanctions, 93 percent of them over sixteen years old, effectively removing them from ordinary trade. Nineteen tankers were scrapped in the first four months of this year, because a twenty year old carrier worth 71 million dollars against a scrap value of 21 million is not going anywhere near a beach.  
  
And the orderbook is filling, somewhere between a fifth and a third of the existing fleet depending on whose count you take, with deliveries concentrated in 2028 and 2029.  
  
That is the 1974 shape exactly. The disruption is being capitalised into steel that arrives after the disruption plausibly ends. For a family with capital rather than a shipping desk, the lesson is not that these assets are bad. It is that the price of a productive asset should be set by what it earns across a cycle, not by what it earns in the month you buy it, and that a fifteen year old ship bought at a new ship's price is a bet on a specific waterway staying closed for a decade. The patient position in a boom like this one is usually to sell into it rather than to join it.

![](https://storage.ghost.io/c/44/88/44885750-7681-4d57-825f-5d69f4c60045/content/images/2026/10/a-fifteen-year-old-ship-worth-more-than-a-new-one-photorealistic.jpg)

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