Ship traffic through the Strait of Hormuz — a critical chokepoint handling about 20% of global crude oil and liquefied natural gas shipments — has fallen to roughly one-quarter of its prewar level. According to a report by the United Kingdom Maritime Trade Operations , the number of vessels transiting the strait has declined by about 75% from before the Iran war.

As disruptions along major maritime trade routes became increasingly apparent, South Korean shipping stocks rose across the board in early trading on Oct. 12. As of 9:34 a.m., STX Green Logis was trading up 5.99% at 2,300 won, or approximately $1.72, from the previous session, while Pan Ocean rose 4.98%, Heung-A Shipping and HMM each gained 3.85%, and Korea Line advanced 2.96%.

The rally in shipping stocks is driven by expectations of higher freight rates amid instability in the Middle East. A tanker was struck by an unidentified projectile in the Strait of Hormuz, while Yemen’s Houthi rebels attacked Saudi Arabia’s energy infrastructure. These developments have significantly increased vessel rerouting and waiting times as geopolitical risks intensify.

The resulting logistics disruptions are reducing effective shipping capacity. In particular, instability in Middle Eastern crude oil supply chains is increasing demand for long-haul transport from alternative producers such as the United States and Brazil, helping sustain elevated tanker freight rates, including those for very large crude carriers (VLCCs).

Financial analysts view the current supply chain disruption as potentially extending beyond a short-term episode into a prolonged structural shift. Daishin Securities said in a report that “a geopolitical shock has been layered on top of a surge in energy demand driven by AI industrialization and an existing supply shortfall,” concluding that the shipping industry has entered the early stages of a “big cycle.”

Lee Ji-ni, a researcher at Daishin Securities, said the number of tankers actually available for deployment had declined as transshipment and rerouting increased. The expansion of ton-miles — the product of transport distance and cargo volume — for crude oil shipments from the United States and Brazil could help sustain high freight rates through next year, Lee added.

However, some market observers cautioned that it remains uncertain whether geopolitical tensions will translate into improved earnings. While instability along maritime routes can push freight rates higher, rerouting also increases fuel consumption and other operating costs. A financial industry official said market participants should closely monitor freight rates and cargo volumes by route before assessing the actual beneficiaries.

Source:Business Korea