Rising risks in the Strait of Hormuz drive up tanker charter costs, with daily rates on Middle East routes approaching $500,000.

As the war in Iran continues to make many shipowners reluctant to enter the Strait of Hormuz, the cost of chartering a Very Large Crude Carrier (VLCC) to transport crude oil on the industry benchmark Middle East to Asia route has approached $500,000 per day. With ships occasionally being attacked while trying to cross the Strait of Hormuz, the number of shipowners willing to dock at ports within the Persian Gulf has decreased significantly. However, some vessels continue to pass through this strategic waterway. Currently, many voyages departing from the Persian Gulf are undertaken by vessels controlled by Middle Eastern oil-producing countries, as well as the relatively low-profile Sinokor, and a few smaller shipping companies with a higher risk tolerance that are willing to sail into this conflict-prone area. This in turn has led to a reduction in the number of publicly visible charter deals on this route, a decline in market liquidity, and has made the main benchmark indicators used to assess VLCC earnings more difficult to evaluate. The resulting market disruptions have even prompted a major global commodity trader to file a lawsuit against the Baltic Exchange, which is responsible for publishing this benchmark indicator.