Fairplay: Middle East – The Hormuz Effect

“This could finally be the year when decades of tension between Iran and its nemeses in Israel and America come to a violent head. Over the past week, fears have been escalated over a pre-emptive strike on Iran’s nuclear facilities by Israel. The question being fervently debated in tanker circles is: how might this play out for rates? . . . If sanctions bite, a greater proportion of Iranian crude could head to Asia that to Europe. However, this may not have a significant affect on rates, because much of the diverted Iranian supply could be replaced by Saudi Arabia and the other Gulf states. ‘We see VLCC trade [from Iran] offset by other VLCC trade, so a net zero effect,’ said Poten & Partners marine research head Megan McCurdy during a recent Wells Fargo investor forum.”