Iran War Disruptions Send Breakwave Tanker Shipping ETF Soaring 3,600%

The Breakwave Tanker Shipping ETF (BWET) has posted stunning gains of 3,600% year-to-date as of early September, making it the best-performing non-levered fund in the US. The surge is attributed to the Iran-US conflict, which has squeezed tanker traffic through the Strait of Hormuz and turned a once-obscure freight investment into one of Wall Street's top trades.

The Strait of Hormuz is a critical shipping route, and disruptions have caused rates on Middle East oil tanker routes to skyrocket by nearly 500% year-over-year. With supertanker rates at record highs, shipping companies are making record profits.

Experts warn that the risk of a swift reversal doesn't seem imminent, with Kyle Peacock, principal at Peacock Tariff Consulting, stating that it's not just the Iran war causing this freight trade to boom. Scrambling of traditional trade routes due to tariffs and widespread drought have created an unprecedented shortage of ships.

John Murillo, chief business officer of B2BROKER, emphasizes that BWET tracks the price of shipping oil, rather than underlying crude oil prices. 'It has very little to do with the oil price itself or its actual volume and depends mainly on geopolitics,' he said.