Escalating Risks Disrupt Shipping in Strait of Hormuz
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy INSW?
Source: CNBC
- Shipping Suspension: Following U.S. and Israeli strikes on Iran, Maersk has announced a halt to all vessel crossings in the Strait of Hormuz, warning of delays for services to Arabian Gulf ports, which could significantly disrupt global trade flows.
- Oil and Gas Trade Impact: In 2023, oil flows through the Strait of Hormuz averaged 20.9 million barrels per day, accounting for 20% of global petroleum liquids consumption, and any disruption in this route is likely to drive up global energy prices and create supply delays.
- Rising Shipping Costs: With escalating tensions, analysts predict higher container shipping rates in the Middle East, as the industry faces increasing geopolitical risks that compel shipping companies to reassess their operational strategies.
- Enhanced Safety Measures: Companies like Hapag-Lloyd and CMA CGM have suspended all sailings through the Strait of Hormuz and directed vessels to safe areas, reflecting a heightened focus on crew safety and further exacerbating uncertainties in the shipping market.
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Analyst Views on INSW
Wall Street analysts forecast INSW stock price to fall
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 75.610
Low
57.00
Averages
58.00
High
60.00
Current: 75.610
Low
57.00
Averages
58.00
High
60.00
About INSW
International Seaways, Inc. is a tanker company engaged in providing energy transportation services for crude oil and petroleum products in international flag markets. The Company operates through two segments: Crude Tankers and Product Carriers. The Crude Tankers segment is made up of a fleet of VLCCs, Suezmaxes, and Aframaxes engaged in the worldwide transportation of crude oil. This segment also includes its Crude Tankers Lightering business through which it provides ship-to-ship (STS) lightering support services and full-service STS lightering to customers in the United States Gulf (USG), United States Pacific, Grand Bahama, and Panama regions. The Product Carriers segment consists of a fleet of MRs, LR1 product carriers, and an LR2 product carrier engaged in the worldwide transportation of refined petroleum products. It owns and operates a fleet of about 84 vessels, including 11 VLCCs, 13 Suezmaxes, five Aframaxes/LR2s, 14 LR1s (including six new buildings), and 41 MR tankers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Escalating Risks Disrupt Shipping in Strait of Hormuz
- Shipping Suspension: Following U.S. and Israeli strikes on Iran, Maersk has announced a halt to all vessel crossings in the Strait of Hormuz, warning of delays for services to Arabian Gulf ports, which could significantly disrupt global trade flows.
- Oil and Gas Trade Impact: In 2023, oil flows through the Strait of Hormuz averaged 20.9 million barrels per day, accounting for 20% of global petroleum liquids consumption, and any disruption in this route is likely to drive up global energy prices and create supply delays.
- Rising Shipping Costs: With escalating tensions, analysts predict higher container shipping rates in the Middle East, as the industry faces increasing geopolitical risks that compel shipping companies to reassess their operational strategies.
- Enhanced Safety Measures: Companies like Hapag-Lloyd and CMA CGM have suspended all sailings through the Strait of Hormuz and directed vessels to safe areas, reflecting a heightened focus on crew safety and further exacerbating uncertainties in the shipping market.
See More
International Seaways Stock Trend Analysis
- Price Growth Trend: International Seaways (INSW) has seen a 52.7% increase in stock price over the past 12 weeks, reflecting investors' sustained confidence in its potential upside, thereby enhancing its appeal for short-term investors.
- Stable Short-Term Performance: The stock has risen 23.9% in the last four weeks, further confirming the continuity of its price trend, indicating that the stock still possesses strong upward momentum in the near term.
- Strong Technical Indicators: Currently, INSW is trading at 94.4% of its 52-week high-low range, suggesting it may be on the verge of a breakout, attracting more investor attention.
- Ratings and Recommendations: With a Zacks Rank of #1 (Strong Buy) and an average broker recommendation of #1 (Strong Buy), INSW indicates high market optimism regarding its future performance, potentially driving further stock price increases.
See More
U.S. to Support Oil Trade in the Gulf
- Oil Price Decline: U.S. crude oil prices fell 1.1% to $73.74 per barrel on Wednesday, marking the first drop since the U.S. initiated military actions against Iran, indicating market concerns over future developments.
- Government Support Measures: Treasury Secretary Scott Bessent announced that the Trump administration will provide insurance for oil tankers in the Gulf through the International Development Finance Corporation and promised naval escorts if necessary, aiming to restore market confidence.
- Strait of Hormuz Traffic Standstill: Tanker traffic through the Strait of Hormuz has nearly come to a halt as ship owners fear Iranian retaliatory strikes, with the strait being the world's most critical chokepoint for oil trade, accounting for about 20% of global oil consumption.
- Market Reaction: Despite a 6% and 5% increase in U.S. crude prices on Monday and Tuesday respectively, market sentiment turned cautious following Bessent's announcement of further support measures, leading to a decline in oil prices.
See More
U.S. Treasury Secretary Announces Measures to Stabilize Oil Shipments
- Oil Shipment Stabilization: U.S. Treasury Secretary Scott Bessent announced a series of measures aimed at stabilizing oil shipments through the Persian Gulf, indicating the government's readiness to intervene amid geopolitical tensions to ensure the safety of this critical energy corridor.
- Insurance Support: The U.S. Development Finance Corporation will provide insurance for crude carriers and cargo ships operating in the Gulf, a move designed to mitigate transportation risks arising from escalating conflicts with Iran, thereby safeguarding maritime trade.
- Price Volatility: U.S. crude prices surged 11% this week to $74.62 per barrel, with a total gain of 30% in 2026, as fears mount that prolonged disruptions in the Strait of Hormuz could push prices above $100 per barrel if the strait is closed.
- Market Supply Stability: Bessent emphasized that despite rising tensions in the Middle East, oil markets are well supplied, and the U.S. is in a stronger position than during the early stages of the Ukraine war, citing record domestic oil and natural gas production and its growing role as a major exporter.
See More
Strait of Hormuz Shipping Disruptions Drive Oil Tanker Costs to Record Highs
- Shipping Costs Surge: Due to the conflict between the U.S. and Iran, shipping through the Strait of Hormuz has been severely disrupted, with Very Large Crude Carriers (VLCC) reaching a record daily rate of $423,736, representing an increase of over 94% from last Friday, directly impacting transportation costs in the global energy market.
- Insurance Coverage Canceled: Major marine insurers have scrapped war risk coverage for vessels operating in the Middle East, leading to increased risks for shipowners navigating the Strait of Hormuz, despite the waterway not being officially closed, which will further exacerbate shipping costs and supply delays.
- Global Energy Prices Rise: With shipping disruptions, global oil and gas prices have significantly increased, expected to create ripple effects in international markets, especially affecting the one-third of seaborne crude oil and 19% of liquefied natural gas flows that transit through the Strait of Hormuz.
- Shipping Companies' Response: Shipping giants, including Maersk, have suspended special cargo acceptance in the UAE, Oman, and other regions, indicating that shipping companies are prioritizing safety amid deteriorating security conditions, which may lead to decreased liquidity in global trade.
See More
Defense Stocks Rise After U.S.-Israeli Strikes on Iran
- Defense Stocks Surge: Following the joint U.S.-Israeli attack on Iran, defense stocks collectively rose, with Lockheed Martin shares gaining 6%, Northrop Grumman up 5%, and drone manufacturer AeroVironment soaring over 10%, indicating strong market optimism regarding defense spending.
- Oil Prices Spike: The escalation of conflict has led to a significant rise in oil prices, with Brent crude hitting a 52-week high of over $78 on Monday, causing Exxon Mobil and Chevron shares to rise about 4% and ConocoPhillips to gain over 5%, reflecting market concerns over potential disruptions to global crude production and transport.
- Tankers Stocks Perform Well: In response to the military strikes in the Middle East, tanker stocks surged, with Frontline rising over 5%, DHT Holdings up 7%, and International Seaways increasing by 6%, showcasing heightened expectations for tanker transportation demand.
- Travel Stocks Decline: The conflict has caused oil prices to surge, disrupting global travel, leading to declines in travel stocks, with Expedia and Booking Holdings down 3.2% and 2.7%, respectively, Delta Air Lines falling 5.7%, and American Airlines and United Airlines dropping at least 6%, reflecting a pessimistic outlook for the travel industry.
See More
Escalating Risks Disrupt Shipping in Strait of Hormuz
- Shipping Suspension: Following U.S. and Israeli strikes on Iran, Maersk has announced a halt to all vessel crossings in the Strait of Hormuz, warning of delays for services to Arabian Gulf ports, which could significantly disrupt global trade flows.
- Oil and Gas Trade Impact: In 2023, oil flows through the Strait of Hormuz averaged 20.9 million barrels per day, accounting for 20% of global petroleum liquids consumption, and any disruption in this route is likely to drive up global energy prices and create supply delays.
- Rising Shipping Costs: With escalating tensions, analysts predict higher container shipping rates in the Middle East, as the industry faces increasing geopolitical risks that compel shipping companies to reassess their operational strategies.
- Enhanced Safety Measures: Companies like Hapag-Lloyd and CMA CGM have suspended all sailings through the Strait of Hormuz and directed vessels to safe areas, reflecting a heightened focus on crew safety and further exacerbating uncertainties in the shipping market.
See More
International Seaways Stock Trend Analysis
- Price Growth Trend: International Seaways (INSW) has seen a 52.7% increase in stock price over the past 12 weeks, reflecting investors' sustained confidence in its potential upside, thereby enhancing its appeal for short-term investors.
- Stable Short-Term Performance: The stock has risen 23.9% in the last four weeks, further confirming the continuity of its price trend, indicating that the stock still possesses strong upward momentum in the near term.
- Strong Technical Indicators: Currently, INSW is trading at 94.4% of its 52-week high-low range, suggesting it may be on the verge of a breakout, attracting more investor attention.
- Ratings and Recommendations: With a Zacks Rank of #1 (Strong Buy) and an average broker recommendation of #1 (Strong Buy), INSW indicates high market optimism regarding its future performance, potentially driving further stock price increases.
See More
U.S. to Support Oil Trade in the Gulf
- Oil Price Decline: U.S. crude oil prices fell 1.1% to $73.74 per barrel on Wednesday, marking the first drop since the U.S. initiated military actions against Iran, indicating market concerns over future developments.
- Government Support Measures: Treasury Secretary Scott Bessent announced that the Trump administration will provide insurance for oil tankers in the Gulf through the International Development Finance Corporation and promised naval escorts if necessary, aiming to restore market confidence.
- Strait of Hormuz Traffic Standstill: Tanker traffic through the Strait of Hormuz has nearly come to a halt as ship owners fear Iranian retaliatory strikes, with the strait being the world's most critical chokepoint for oil trade, accounting for about 20% of global oil consumption.
- Market Reaction: Despite a 6% and 5% increase in U.S. crude prices on Monday and Tuesday respectively, market sentiment turned cautious following Bessent's announcement of further support measures, leading to a decline in oil prices.
See More
U.S. Treasury Secretary Announces Measures to Stabilize Oil Shipments
- Oil Shipment Stabilization: U.S. Treasury Secretary Scott Bessent announced a series of measures aimed at stabilizing oil shipments through the Persian Gulf, indicating the government's readiness to intervene amid geopolitical tensions to ensure the safety of this critical energy corridor.
- Insurance Support: The U.S. Development Finance Corporation will provide insurance for crude carriers and cargo ships operating in the Gulf, a move designed to mitigate transportation risks arising from escalating conflicts with Iran, thereby safeguarding maritime trade.
- Price Volatility: U.S. crude prices surged 11% this week to $74.62 per barrel, with a total gain of 30% in 2026, as fears mount that prolonged disruptions in the Strait of Hormuz could push prices above $100 per barrel if the strait is closed.
- Market Supply Stability: Bessent emphasized that despite rising tensions in the Middle East, oil markets are well supplied, and the U.S. is in a stronger position than during the early stages of the Ukraine war, citing record domestic oil and natural gas production and its growing role as a major exporter.
See More
Strait of Hormuz Shipping Disruptions Drive Oil Tanker Costs to Record Highs
- Shipping Costs Surge: Due to the conflict between the U.S. and Iran, shipping through the Strait of Hormuz has been severely disrupted, with Very Large Crude Carriers (VLCC) reaching a record daily rate of $423,736, representing an increase of over 94% from last Friday, directly impacting transportation costs in the global energy market.
- Insurance Coverage Canceled: Major marine insurers have scrapped war risk coverage for vessels operating in the Middle East, leading to increased risks for shipowners navigating the Strait of Hormuz, despite the waterway not being officially closed, which will further exacerbate shipping costs and supply delays.
- Global Energy Prices Rise: With shipping disruptions, global oil and gas prices have significantly increased, expected to create ripple effects in international markets, especially affecting the one-third of seaborne crude oil and 19% of liquefied natural gas flows that transit through the Strait of Hormuz.
- Shipping Companies' Response: Shipping giants, including Maersk, have suspended special cargo acceptance in the UAE, Oman, and other regions, indicating that shipping companies are prioritizing safety amid deteriorating security conditions, which may lead to decreased liquidity in global trade.
See More
Defense Stocks Rise After U.S.-Israeli Strikes on Iran
- Defense Stocks Surge: Following the joint U.S.-Israeli attack on Iran, defense stocks collectively rose, with Lockheed Martin shares gaining 6%, Northrop Grumman up 5%, and drone manufacturer AeroVironment soaring over 10%, indicating strong market optimism regarding defense spending.
- Oil Prices Spike: The escalation of conflict has led to a significant rise in oil prices, with Brent crude hitting a 52-week high of over $78 on Monday, causing Exxon Mobil and Chevron shares to rise about 4% and ConocoPhillips to gain over 5%, reflecting market concerns over potential disruptions to global crude production and transport.
- Tankers Stocks Perform Well: In response to the military strikes in the Middle East, tanker stocks surged, with Frontline rising over 5%, DHT Holdings up 7%, and International Seaways increasing by 6%, showcasing heightened expectations for tanker transportation demand.
- Travel Stocks Decline: The conflict has caused oil prices to surge, disrupting global travel, leading to declines in travel stocks, with Expedia and Booking Holdings down 3.2% and 2.7%, respectively, Delta Air Lines falling 5.7%, and American Airlines and United Airlines dropping at least 6%, reflecting a pessimistic outlook for the travel industry.
See More
