The risks in the Strait of Hormuz are driving up tanker chartering costs, with daily rates for Middle Eastern routes nearing $500,000.

As the war in Iran continues, many shipowners are reluctant to navigate the Strait of Hormuz. The cost of chartering a very large crude carrier (VLCC) for transporting crude oil on the Middle East to Asia route, which serves as an industry benchmark, has approached nearly $500,000 per day. Due to occasional attacks on vessels attempting to transit the Strait of Hormuz, the number of shipowners willing to dock at ports within the Persian Gulf has significantly decreased. However, some vessels still continue to pass through this critical chokepoint. Currently, many voyages departing from the Persian Gulf are being handled by ships controlled by Middle Eastern oil-producing countries. Additionally, there are the relatively low-profile Sinokor and a few small shipping companies with a higher risk tolerance that are willing to enter this conflict-prone area. This, in turn, has led to a decrease in the visible number of charter transactions on this route, reduced market liquidity, and made it more challenging to assess the main benchmark indicators for VLCC earnings. The related market disruptions have even led a major global commodity trader to file a lawsuit against the Baltic Exchange, which is responsible for publishing this benchmark indicator.