Tanker: Historically high rates driven by supply shock
The crude tanker market has surged following the effective closure of the Strait of Hormuz. At one point last week, VLCC earnings reached approximately USD 480,000 per day. While rates have corrected this week, they still remain significantly above the 2008 financial crisis peak. Suezmax and Aframax markets have similarly strengthened, although future uncertainty remains. The spike reflects an unprecedented tightening of tanker supply, with approximately 120-130 crude tankers and 290+ product tankers stranded in the Persian Gulf as transits through Hormuz have collapsed by more than 90%. The sustainability of current levels depends critically on the conflict trajectory and the extent to which prolonged disruption constrains global cargo volumes alongside vessel supply tightness.

LPG/VLGC: Gulf disruption halts exports and pressures Western rates
LPG shipping faced severe disruption as exporters suspended cargo loadings and VLGC spot market activity in the Middle East Gulf ground to a halt. In the Western market, VLGC rates declined week-on-week to approximately USD 62,300 per day on the Houston-Chiba route (down 14%), reflecting expectations of diverted tonnage repositioning westward and the onset of seasonal supply pressure. The longer-term trajectory will depend on how quickly Gulf export operations normalize and the severity of any sustained disruption to LPG production capacity.

PCTC: Firm rates supported by tight fleet availability
The car carrier market remained firm with six-to-twelve-month timecharter rates for modern tonnage at approximately USD 50,000 per day, reflecting limited near-term vessel availability and ongoing global automotive export demand. Downside risks remain concentrated on potential macroeconomic headwinds, though the tight underlying fleet structure may moderate the pace of any freight correction.

Geopolitics: Hormuz disruption creates historic shock to global energy flows
The escalation of conflict between the United States, Israel and Iran has created unprecedented disruption to one of the world’s most critical maritime chokepoints, with transits through the Strait collapsed to fewer than 5 vessels per day from approximately 150 daily prior to the conflict. This represents a 95%+ reduction in traffic through a corridor carrying approximately 30% of seaborne crude oil trade, 30% of global LPG shipments, 20% of LNG trade and 20% of refined products. Supply-side disruptions are already emerging, with Iraq suspending production at two major oil fields (approximately 1.9 million barrels per day) and alternative export corridors via pipeline capacity limited to only approximately 4 million barrels per day, representing just 20% of typical Hormuz crude flows. Demand-side responses have accelerated rapidly, with China ordering suspension of diesel and gasoline exports, India and Japan cancelling refined product deliveries, and Indonesia declaring force majeure. The near-term outlook for shipping remains highly uncertain, ranging from rapid diplomatic resolution to prolonged disruption that constrains both cargo volumes and vessel supply, with significant implications for global energy markets and inflation dynamics.