Iran War Drives Oil Tanker Earnings to Record High

The Iran war has significantly disrupted oil tanker flows, causing earnings to skyrocket. According to Baltic Exchange data, ships hauling cargoes from Saudi Arabia to China were pulling in a record US$647,000 per day on Thursday, more than ten times the rate a year earlier.

This surge in rates began late last week when Sinokor Group, led by Ga-Hyun Chung, told market participants that it hired out ships at elevated rates. The company had previously embarked on the biggest oil tanker bet ever, buying dozens of ships before the Iran war began and hiring them out at heightened rates.

The Iran war has made shipping through the Strait of Hormuz hazardous, with few shipowners willing to take the risk. As a result, owners are demanding huge premiums, making it expensive for companies like TotalEnergies SE to move barrels through the waterway. CEO Patrick Pouyanne estimated that it costs about US$20 million to do so.