Tanker freight rates are rising due to tensions in Iran.

Increase in Tanker Freight Rates: Impact of Iran Tension

Baltic Exchange data indicates that the daily earnings of a vessel on the TD3C route rose by 5.1%, reaching approximately 129,000 dollars. This marks the highest level recorded since the end of November. The increase is attributed to a 61.6% surge driven by growing concerns over a potential U.S. military operation against Iran last Friday.

Iran's Military Drills Concern Markets

On Friday, reports of Iran conducting military exercises with real weapons raised concerns in the markets, while Bloomberg News reported that Greece, which owns the world's largest tanker fleet, has warned its vessels to stay clear of Iranian shores while passing through the Strait of Hormuz.

Tanker Supply Tightens and Prices Rise

Vortexa ship tracking platform's freight analyst Wanying Zhang noted that the supply of suitable tankers for short-term charter has tightened with large companies, such as Sinokor Merchant Marine, acquiring around 30 mid-aged tankers. Zhang stated, "The reduction in immediately available ships has granted significant pricing power to the remaining independent ship owners."

Moreover, ship brokers reported that due to the increasing tensions between Iran and the U.S. in recent weeks, chartering companies have rushed to secure vessels in preparation for potential supply disruptions. Consequently, freight rates began to rise. Brokers indicated that the Worldscale index jumped from 105 to 140 due to disruptions on the TD3C route. However, it is suggested that concerns regarding developments in the Middle East may ease and the upward momentum could slow.

U.S. Diplomatic Opening

U.S. President Donald Trump stated that he is open to talks with Iran in the coming days. This creates the impression that both countries may take a step back from the brink of conflict. The possibility of easing tensions has caused a decline in crude oil futures prices this week.