The Iran war is minting new one-day millionaires: oil tankers brave enough to sail across the Strait of Hormuz

In recent months, the Iran war has given birth to a new category of millionaires: oil tankers that undertake treacherous voyages across the Strait of Hormuz. These daring vessels transport oil from the Persian Gulf to China, navigating through a heavily contested region plagued by strikes, sabotage, and rising insurance premiums.

According to data from the Baltic Exchange, a single tanker hauling oil from the Gulf to China now incurs daily expenses of $1.035 million, a staggering figure marking the first time it has surpassed seven figures. This surge in costs is attributed to the heightened geopolitical risks and the urgency of exporting oil due to constrained supply, which has pushed prices back above $100 per barrel.

Ioannis Papadimitriou, a principal freight analyst at Vortexa, attributes the exorbitant shipping costs to both the inherent dangers of the Strait and the critical need for the commodity being transported. As attacks in the area continue to escalate, commercial ships have become frequent targets of strikes, with two tankers hit by projectiles in the Strait on Friday, according to a UK navy agency.

The increased demand for shipping services has led to market consolidation, allowing shipping firms to raise prices and consolidate their power in the market. These increased freight costs are hurting refineries, which must contend with higher shipping expenses and increased crude costs. The result is shrinking margins and higher costs passed on to consumers, with diesel prices already surpassing $6, 60% higher than pre-war levels.

However, the shipping companies are reaping the benefits, with shipbrokers and oil freight funds posting record earnings and soaring valuations. This surge in shipping costs has made the maritime industry the primary beneficiary of the Iran war, as geopolitical instability continues to drive trading inefficiencies and fuel profits for the shipping sector.