The war in the Middle East shows no signs of ending, despite numerous ceasefire attempts and the recent Versaille, France agreement between the US and Iran. And once again, despite the strategic Strait of Hormuz blocked and causing numerous operational difficulties for ships, the shipping industry has once again emerged as the clear winner from the current crisis.
That’s because spot freight rates in the key tanker segment, large vessels to transport crude oil from the Middle Eastern countries to key consuming countries in India and China, have jumped nearly 2-to-3 fold y-o-y in the June 2026 quarter. Also, in the smaller dry bulk segment, the Baltic Dry Index averaged 87% y-o-y higher in Q1FY27 on account of strong demand for transporting merchandise before the US holiday season shopping starts in October / November.
Middle East war once again drives spot tanker freight rates in Q1FY27
In the tanker segment like very large crude carrier (VLCC), spot freight rates had averaged $ 137,000 per day in the June 2026 quarter, as compared to $ 42,065 per day a year earlier, a rise of nearly 226% y-o-y, according to industry data from a leading Indian shipping company.
The above rates indicate global market trends and not a particular voyage between two ports, pointed out senior shipping officials.
Top level executives from the Indian shipping industry highlighted the continuing challenges they faced operating vessels in the key Middle Eastern and neighbouring regions. For instance, safety of personnel on board the ships coupled with global insurance still reluctant to provide suitable insurance companies, and the resulting significant risks for the global shipping industry.
Shipping executives also pointed out that nearly 20% of VLCC capacity globally is more than 20 years old and not permitted to sail. The above trend has also contributed to higher spot freight rates in this segment.
In other tanker segments, like Suezmax, the spot freight rates had averaged $ 140,300 per day in the June 2026 quarter as compared to $ 46,050 per day a year earlier, a rise of nearly 204.6% y-o-y.
As a result, while global crude oil prices have come down currently to $ 75 to $ 80 per barrel levels from their peak of $ 125 per barrel in early March 2026, however, spot tanker shipping freight rates have remained stubbornly high.
In the smaller dry bulk segment, the Baltic Dry Index averaged 2,751 in Q1FY27, as compared to 1,471 a year earlier, a rise of 87% y-o-y. It is understood there is strong demand to transport merchandise to US retailers from suppliers in East Asia, China and India before the start of the holiday shopping season in October / November.
Indian shipping companies – maximizing freight earnings
Indian shipping companies typically have 70% of their total fleet capacity dedicated to the tanker segment for transporting crude oil and other products. Shipping companies utilise a combination of short and long-term contracts with their customers to maximize their earnings.
To the extent the ships are already available for contract, or coming out of contract shortly, the companies can benefit from this surge in rates. If however, the ships are already tied up in long term contracts, these interim rate movements will have no impact on the companies’ finances.
Great Eastern Shipping, a leading Indian player, at the time of declaring fourth quarter of FY26 results had a fleet capacity of 3.19 million dwt (dead weight tonne).
Strong freight rates resulted in GE Shipping’s consolidated revenue from operations rising 23.5% y-o-y to Rs 1,511 crore in the March 2026, and higher freight earnings and other income helped the company’s consolidated net profit rise 187.6 % y-o-y to Rs 1,044.1 crore in the March 2026 quarter.
Meanwhile, the government-controlled Shipping Corporation of India has highlighted a fleet capacity of 58 vessels with 5.26 million dwt, as per its investor presentation for fourth quarter of FY26.
GE Shipping and Shipping Corporation of India have not yet announced the schedule of results declaration for the June 2026 quarter.
Return on Equity – making the most efficient use of capital
GE Shipping Company had a Return on Equity (RoE) of 15.9%, according to Screener.in.
Shipping Corporation of India had a RoE of 15.5%, according to Screener.in.
| Shipping company | Return on Equity (RoE) (%) |
| GE Shipping Company | 15.9% |
| Shipping Corporation of India | 15.5% |
Is it still worth investing in shipping stocks?
GE Shipping ended 0.65% higher on Friday at Rs 1,422, and it had reached a 52-week high of Rs 1,798 on 19 May, 2026.
And Shipping Corporation of India ended 2.7% higher on Friday at Rs 284.9, and it had reached a 52-week high of Rs 368.5 on 11 May, 2026.
Valuations of leading Indian shipping companies
| Shipping company | Consolidated P/E | Price-to-book value |
| GE Shipping | 8.2 times | 1.2 |
| Shipping Corporation of India | 9.8 times | 1.5 times |
Meanwhile, GE Shipping trades at a consolidated P/E of 8.2 times, according to Screener.in and it is 9.8 times for Shipping Corporation of India. While in most sectors the above valuations may seem reasonable, however, in a cyclical industry like shipping, a low P/E need not indicate a cheap valuation.
Another valuation metric often used to evaluate shipping stocks, is Price-to-Book value (PBV). GE Shipping trades at 1.2 times book value, and over the past 5-years, the stock has traded on the above valuation matrix between 0.5 times and 1.8 times.
Shipping Corporation of India trades on the above valuation matrix at 1.5 times. Over the past 5 years, Shipping Corporation of India has traded on the above valuation matrix between 0.4 and 2.3 times.
The global shipping industry tends to be quite volatile, despite the steps taken by leading shipping companies to bring stability to operations via long-term contracts.
Readers could add leading shipping stocks to their watch list for 2026.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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