Japan to diversify crude supplies, back pipelines that bypass Hormuz

Korean shipyards are experiencing a surge in inquiries for Suezmax tankers as the ongoing U.S.-Iran conflict diverts Middle East crude away from the Strait of Hormuz, according to the Korea Energy Economics Institute's weekly oil market report. Suezmax tankers, the largest vessels that can pass through the Suez Canal fully loaded, have become the preferred choice for shipping oil due to their ability to navigate the shorter northern route from Saudi Arabia's Yanbu port to Egypt's Ain Sukhna terminal.

This route circumvents the potential threats posed by Houthi rebels in the Bab el-Mandeb Strait, which lies at the southern entrance to the Red Sea. With freight rates high and the need for rapid deployment, owners are willing to pay premiums for Suezmax tankers, as they can enter service almost immediately compared to newly ordered vessels that take over three years to deliver.

As a result, Korean shipyards, including Daehan Shipbuilding and Samsung Heavy Industries, are seeing a sharp increase in Suezmax tanker orders.