"THE SPICE MUST FLOW"

The dominant issue at the moment is the de facto blockade of the Strait of Hormuz. Roughly one-fifth of global oil supply normally passes through this narrow waterway, making it one of the world’s most critical energy chokepoints. 

Currently, about 6% of global crude tanker capacity is trapped inside the Persian Gulf, while another 6-10% is waiting in the Gulf of Oman. As a result, the net impact on fleet utilization is slightly negative.

The benchmark TD3C route from the Middle East Gulf to Asia is quoted at WS 465 (around USD 450,000 per day), though this is largely theoretical as few ships are being fixed. TD22 from the U.S. Gulf Coast to China is currently about USD 166,000 per day and likely reflects the market more accurately. Notably, rates have already started to soften.

The key question for the tanker market is when vessels will be able to transit the strait again - either through risk-taking “blockade runners” or under naval escort with proper insurance. Ultimately, however, the decision rests with each captain weighing commercial opportunity against crew safety.

We currently see a reopening of the strait within two to three weeks as more likely than a prolonged blockade. If exports resume and parts of the Iranian fleet are sidelined - similar to the situation in Venezuela - the outlook for the compliant fleet would improve further. 

  © OpenStreetMap contributors  

IRAN CONFLICT LEAVES ITS MARK

International equity markets declined last week as investors reacted to a combination of heightened geopolitical tensions, rising energy prices, and weaker macroeconomic signals. The escalating conflict in the Middle East increased uncertainty and pushed oil prices higher, raising concerns about inflation, potential disruptions to global trade and energy supply, and a slowdown in global economic growth. These developments triggered a broad risk-off sentiment among investors, leading to sell-offs across major equity indices. European markets were particularly affected due to their higher sensitivity to energy costs and geopolitical developments. Asian equity markets also weakened but recorded more moderate declines than those seen in Europe and the United States.

Shipping equities fell 2.1% week-over-week. The crude tanker sector was particularly affected (-5.4%), while the dry bulk sector also suffered a sharp decline (-7.8%). In contrast, the LNG sector posted a strong gain (+5.4%), benefiting from expectations of tighter gas supply and potentially stronger LNG trade flows. The liner sector edged slightly higher (+0.5%) as renewed geopolitical tensions further reduced the likelihood of a near-term normalization of routing through the Suez Canal, supporting longer voyage distances.

Against this backdrop, the trading strategy declined by 7.3%, reflecting its overweight exposure to the tanker and dry bulk sectors, which underperformed during the week.

DISCLAIMER

This document has been prepared and approved by Notos Consult GmbH and is for informational purpose only. The information presented in this report is intended for the recipient to whom it was delivered. Reproduction or distribution of this document in whole or in part is not permitted without the express written consent of Notos Consult GmbH.

This document contains forward-looking statements. We caution the reader that forward-looking statements are not guarantees of future performance. Past returns are no indication of future returns. The development of the industry, markets, and companies described in this document may differ materially from the forward-looking statement contained herein.

Information and opinions contained in this document have been compiled from sources believed to be reliable. Unless otherwise stated, any statements herein are based on our own estimates at the time of publication. Notos Consult GmbH makes no representation as to the accuracy or completeness of any of the information contained herein and accepts no liability for loss arising from the use of the information provided. 

This document is not an offer of any kind. This report has been prepared separately from any proposed offering of any security and as such information herein must not be relied upon as having been authorized or approved by the issuer of such security.

PUBLISHER

Notos Consult GmbH 

Trostbruecke 1 

20457 Hamburg 

Germany

Registered Office: Hamburg

Registration Court: Amtsgericht Hamburg | HRB 120813

Managing Directors: Dr. Jens Rohweder | Dr. Christina Stahn

CONTACT

M +49 (0)176 176 75 701 

info@notos-group.com