Key facts
- Used oil tanker prices exceed new builds due to Iran war.
- Daily shipping costs across the Strait of Hormuz exceeded $1 million.
- Insurance premiums for vessels have risen significantly.
- Shipbrokers report record earnings amid increased demand.
- The Breakwave Tanker Shipping ETF has seen substantial year-to-date gains.
Prices for used oil tankers are surging, with 15-year-old vessels now commanding higher prices than new builds. This trend is driven by the ongoing conflict between the U.S. and Iran, which is forcing shipping companies to bypass the Strait of Hormuz and increasing demand for available ships. The daily cost for a vessel to haul oil from the Persian Gulf to China has exceeded $1 million for the first time, according to data from the Baltic Exchange. This exorbitant cost is attributed to the dangers associated with crossing the chokepoint and the urgent need for the commodity amid constrained supply. Insurance premiums for vessels have also risen significantly, contributing to the increased freight costs. Shipbrokers like Clarksons are reporting record earnings, and the Breakwave Tanker Shipping ETF has seen substantial gains year to date, indicating the profitability of the shipping industry amidst the conflict.