As a geopolitical crisis in the Middle East sends global ocean freight rates surging, Korea-based Sinokor Merchant Marine is emerging as the biggest beneficiary. Sinokor Merchant Marine secured more than 100 very large crude carriers at a cost of over 4 trillion won up until just before the outbreak of the Iran war. With the closure of the Strait of Hormuz sending tanker charter rates to a record high per day, the company is reaping massive revenue.
On the 15th, according to the shipping industry, Sinokor Merchant Marine's tanker (oil and gas, and other liquid cargo) unit, Janggeum Maritime, in recent months secured 36 very large crude carriers (VLCCs) through various means including purchasing secondhand vessels and chartering. The number of VLCCs operated by Janggeum Maritime has increased to more than 100.
The unprecedented investment was reportedly led directly by Sinokor Merchant Marine Chairman Jeong Tae-soon and his eldest son, Director Jeong Ga-hyeon. With this transaction, Janggeum Maritime has secured 11% of the global VLCC fleet (estimated at 880 vessels). Sinokor Merchant Marine is estimated to have invested about $3 billion (about 4.5 trillion won) to secure these VLCCs.
As oil storage facilities near the Strait of Hormuz reach capacity due to the closure, Sinokor Merchant Marine is generating massive revenue. On the 14th (local time), the Singapore daily Straits Times reported that a few weeks before the Iran war began, Director Jeong Ga-hyeon ordered at least six empty very large tankers to move to the Persian Gulf and stand by.
Sinokor Merchant Marine is said to be lending the tankers on standby in the Persian Gulf for crude storage at $500,000 per day (about 750 million won). That is about 10 times last year's rental rate.
If the Strait of Hormuz is closed, oil-laden ships can neither leave nor enter and must remain at sea. With onshore storage tanks already full, refiners have no choice but to rent tankers as "warehouses at sea," even if they must pay penalties for breach of contract.
A windfall from short-term charter rates is also expected. Short-term charters are single-shot, short-duration rentals aligned with market conditions whenever cargo demand arises. According to data from Tankers International, a global tanker management company, a recently concluded contract in Brazil set the daily rate at $181,000 (about 270 million won). That is about three times the average daily revenue of a VLCC at the start of the year.