The Biggest Freight Story in Two Decades
The Strait of Hormuz has been effectively closed since February 28 following US and Israeli strikes on Iran. War risk P&I insurance for Gulf transits was cancelled outright on March 5. The result: over 150 tankers anchored outside the strait, with only 21 completing transit since hostilities began versus 100+ per day before the conflict.
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Rate Numbers Are Extraordinary
The benchmark VLCC MEG-China rate hit $423,736 per day as of March 26, up 94% week-on-week. By March 29 that number had climbed to $445,000 per day per Shatterbelt. The EIA confirmed these are the highest Middle East crude tanker rates since at least November 2005.
Suezmax rates hit $75,000 per day. Aframax hit $65,000 per day. Every class is printing record numbers.
The Standout Sub-Story: Aframax UKC Cross-Trade
Aframax rates on the UKC cross-trade spiked 55% week-on-week to $237,000 per day. This was driven by a US 60-day Jones Act waiver pulling tonnage toward SPR deliveries and domestic refinery supply on both coasts.
Tanker Stocks Are Responding
FRO, STNG, INSW, and EURN all hit all-time highs. The sector is up 30-50% since February 28.
Why This Matters for Stock Investors
A ceasefire headline would collapse rates 40-60% immediately as the idled fleet returns. This is a high-conviction trade with a defined exit trigger. The longer Hormuz stays closed, the larger the dividend checks get.
The index behind these rate movements is explained in What Is the Baltic Dirty Tanker Index, the benchmark gauge that measures crude tanker freight. For investors new to why VLCCs specifically drive the record headlines, What Is a VLCC? covers the vessel class and its role in global oil movement.