The ongoing war in Iran has significantly impacted global shipping, particularly affecting the crucial Strait of Hormuz, which previously facilitated 20% of the world’s hydrocarbon supply. With the strait’s closure, oil and gas shipments from the Persian Gulf have become increasingly rare, requiring unconventional strategies like disabling satellite tracking or transferring cargo at sea at high costs. As navigating through Hormuz grows riskier and more expensive, owning oil tankers is becoming essential for oil-exporting nations.
This shift has sparked a competitive drive among oil producers to acquire tanker fleets, given the strategic importance of controlling shipping capacity. With vessel values rising dramatically, tanker owners are experiencing significant profits as demand surges.
Cost estimates for traversing Hormuz have skyrocketed, with transport for a single voyage reaching approximately $20 million. The market for Very Large Crude Carriers (VLCCs) has seen prices for second-hand vessels increase to about $182 million, compared to approximately $130 million for new builds, leading to intense competition for these ships.
As older tankers become scarce due to owners holding onto profitable vessels, shipbuilders are overwhelmed with orders, particularly from oil-exporting nations. For instance, South Korean giant Sinokor has expanded its VLCC fleet, while the UAE’s ADNOC Logistics has also made significant purchases.
This crisis has not only turned tanker ownership into a strategic necessity for oil-producing nations but has also attracted outside investors to the shipping sector, which has historically been dominated by a few players. High freight rates make shipping assets increasingly appealing, suggesting a potential shift in the landscape of shipping investments.
