Hormuz Strait conflict drives first-quarter profits to record highs, while cruise ship owners worry about a subsequent market crash

According to the Financial Times, the global oil shipping industry posted a record first-quarter profit of $3.6 billion, driven by the war that broke out in February and Iran’s blockade of the Strait of Hormuz. However, as the U.S. and Iran negotiate the reopening of this critical waterway, tanker owners now face the risk of plummeting freight rates and market collapse. The blockade stranded over 160 tankers in the Persian Gulf, and constrained capacity pushed daily charter rates for large tankers to a peak of $386,685. In anticipation of the waterway’s imminent reopening, daily rates have recently fallen to between $55,000 and $95,000—still above the historical average of $30,000–$40,000.