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Market Chatter: Tanker Shipping ETF Soars Nearly 4,000% as Middle East Conflict Drives Freight Rate Boom

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Tanker earnings have surged this year amid the ongoing conflict in the Middle East, drawing fresh investor interest to the global shipping industry and helping drive a 3,847% year-to-date rally in the Breakwave Tanker Shipping ETF.

This comes as average daily earnings for very large crude carriers surge 20-fold, while one-year charter rates have nearly tripled from a year earlier to $150,000 per day, according to a Bloomberg report.

Estimates now point to roughly $300 billion in profits for the world's shipping fleet this year, Abhishek Pandey, the global head of transport finance at Standard Chartered, told Bloomberg.

This surge is also spilling over to the resale market, with a nearly-new supertanker being resold to a buyer for $200 million, according to Matthew Freeman, vice president of valuation and analytics at Veson.

Freeman, however, cautioned that the rush to build new vessels could weigh heavily on freight rates in the coming years, as VLCCs currently under construction are equivalent to 38% of the existing fleet, up from 14% a year ago, he said.

Breakwave Advisors, the company behind the Breakwave Tanker Shipping ETF did not immediately respond to' request for a comment on this story.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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