Billionaire John Fredriksen made a fortune shipping oil during the Iran-Iraq conflict in the 1980s. The Ukraine war has sent tanker rates soaring, reprising that purple patch for the industry. The EU plans to ban seaborne imports of Russian crude starting next month. Rates measured by the Baltic index for “dirty” crude tankers are at an 18-year peak, up to $110,000 per day for the largest carriers. Expect high prices for oil deliveries to persist for a while to come. The situation is in stark contrast to the past few years. Lower demand for oil after the pandemic began meant many important shipping routes became unprofitable, especially for very large crude carriers. Tough conditions prompted two of the industry’s largest shippers, Belgium’s Euronav and Frontline, owned by Fredriksen, to announce an all-share tie-up in April. Share prices of the two companies have followed rates higher. They have almost doubled since then. Russia’s invasion of Ukraine has changed the script. Short term, there is a rush to get Russian crude into Europe before the ban. Traders are also rerouting Russian shipments to farther-off destinations, notably India and China. Crucially, the supply of smaller Aframax and Suezmax tankers able to serve Russian ports will remain tight. Fleet sizes have not kept up with the rapid shift in trade patterns, notes Erik Grundt of Rystad Energy. New vessels joining the fleet this year are at a 20-year low. New orders remain the lowest since the 1980s as a share of the fleet. Shipbuilders are focusing on creating new container vessels and LNG carriers. At almost 11 years, the average age of tankers is at a 20-year high. A Russian effort to bolster its own tanker fleet is putting further pressure on ship supply. Russia plans to spend $17bn over the next few years to close a capacity deficit of 750,000 barrels of crude per day or about 70 ships, Rystad estimates.Sector earnings estimates back close to their 2020 peak may come under short-term pressure if the Ukraine war ends. Longer-term capacity constraints mean investors should look out for opportunities to come aboard.If you are a subscriber and would like to receive alerts when Lex articles are published, just click the button “Add to myFT”, which appears at the top of this page above the headline.