Global shipping major Frontline has continued to offer its ships for loading in the Persian Gulf amid the Israel-Iran conflict, and completed at least one deal June 18, according to a source with direct knowledge of the matter June 19.
Frontline has not stopped concluding shipping fixtures in the Persian Gulf and will continue to do so for now, said the source.
In one such deal, the 2018-built, and Marshall Islands-flagged Long Range 2 tanker, the Front Polaris, was chartered out to Marubeni for a July 1 naphtha loading in the Persian Gulf at w207.5, according to at least three trading sources in Singapore and Oslo who confirmed the deal.
This is one of the highest freight payments for this route so far in 2025, according to data collated by Platts, part of S&P Global Commodity Insights.
Owners have been capitalizing on the surge in freight rates by making significantly higher offers, taking into account the heightened risks associated with operating their tankers in the Persian Gulf.
Frontline is among the world’s largest shipping companies by fleet size and regularly offers its tankers in both the clean and dirty segments. One of its product tankers, the Front Altair, was attacked in the Persian Gulf region six years ago. This incident, along with a series of similar attacks, led a consortium of insurance underwriters to designate the Persian Gulf and Gulf of Oman as a high-risk area for the purpose of calculating insurance premiums.
New Normal
Nearly all major shipping companies continue to charter their vessels to oil and trading companies to load cargoes in the Persian Gulf and transport them through the Strait of Hormuz.
“This is the new normal; ships are being given and taken to load in the war zone, but the freight is significantly higher,” said a chartering executive with a global commodity trading company. “How long this will continue will depend on whether the Gulf War escalates,” the executive said.
Charterers who have hired oil tankers in the past 24 hours to load in the Persian Gulf and transport cargoes through the Strait of Hormuz include Aramco Trading Company, Adnoc Global Trading, BP, Vitol, PetroChina and Shell, according to sources with direct knowledge of the matter. Other companies currently seeking tankers in the Persian Gulf include Chevron and Total.
Platts assessed the benchmark Persian Gulf-China VLCC freight at w70, basis 270,000 mt, close to year-to-date highs of w76.5 from mid-January.
The additional war risk premium has jumped fourfold over the last week and is now around 0.20% of the hull and machinery value of a tanker for a seven-day transit in the designated high-risk area around the Persian Gulf, according to shipping sources.
“The market direction will depend on whether any other country gets involved in this [conflict] between Israel and Iran,” said a shipping executive in Shanghai.
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Source: S&P Global
