Messy Strait of Hormuz reopening boosts tankers
The guest argued that a messy normalization and reopening of the Strait of Hormuz will act as a major catalyst for crude tankers due to severe logistical congestion and traffic jams.
The argument
The guest explained that when production and shipping normalize, a 'feeding frenzy' of tankers arriving simultaneously to drain filled storage tanks in the Middle East will create massive traffic jams. This inefficiency will soak up vessel capacity and allow tanker owners to collect lucrative waiting fees, driving up profitability.
The thesis, stress-tested
✓ What validates it
- ✓Aramco or other Middle Eastern national oil companies fixing dozens of tankers simultaneously
- ✓Spikes in tanker waiting times and demurrage fees in the Persian Gulf
▸ Risks discussed
- ▸A permanent or long-term full closure of the Strait of Hormuz leading to global demand destruction
- ▸A severe global macroeconomic meltdown unrelated to shipping
Hear it yourself
"So that would be companies like Frontline, Ticker, FRO, DHT, which is a VLCC pure play. In theory, all these companies are gonna benefit from Synacor, a private player, essentially making the market. Now, when the war hit, all of a sudden the vessel class that was the least exciting in tankers, the MRs became the most exciting."
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