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Oil tanker market roiled by Israeli airstrikes against Iran - BLOOMBERG
(Bloomberg) — Israel’s overnight airstrikes on Iran drove up freight rates and tanker stocks Friday as traders and investors priced in the prospect of disruption to a large swath of the global oil-shipping fleet.
Forward freight agreements for July — bets on the future cost of moving Middle East crude to Asia — jumped 15% to $12.83 a metric ton, according to data from brokerage Marex Group Plc. Tanker stocks surged, with one of the world’s top owners saying it was more wary of leasing out its vessels in the region.
Israel struck targets across Iran early Friday, including nuclear and military facilities. The operation marked a significant escalation in the standoff between the two adversaries, with Tehran vowing its foe will “pay a very heavy price.”
“For now, this is a risk premium — owners will hold back from putting ships into the Gulf on a business-as-usual basis,” said Anoop Singh, global head of shipping research at Oil Brokerage Ltd. “A threat of war in the Middle East is material to freight rates.”
The attacks have revived longstanding concerns in the oil and shipping markets that Iran could try to shut the Strait of Hormuz, an unavoidable chokepoint for a large chunk of the world’s petroleum.
Tehran has made multiple threats to shut the waterway over the years, even if there are good reasons to believe it wouldn’t do so for any long period of time.
That doesn’t preclude harassment of commercial shipping controlled by Iran’s rivals, making voyages more fraught and owners more wary — a tactic Tehran has deployed in the past.
Read, July 2019: A Giant Tanker’s Fraught Journey Through Hormuz
Tokyo-based shipping companies Nippon Yusen KK, Mitsui OSK Lines Ltd. (MTSFY, 8031.T, 9104.T) and Kawasaki Kisen Kaisha Ltd. (9107.T, KAIKY, KAKKF) were among the first to instruct vessels to exercise caution after the overnight strikes.
Among Asian stocks, Cosco Shipping Holdings Co. and China Merchants Energy Shipping Co. (601872.SS) rose more than 5% on Friday. In Europe, Frontline Plc jumped as much as 7.9% in Oslo.
