Freight rates chart their own course amid turmoil

For the tanker market, recent escalation in the Mideast conflict has largely been offset by soft fundamentals

Israel’s expanding war continues to cast a shadow over global politics and the commodity markets, especially given recent fears of an escalation with Iran. At the same time, the global tanker market is no stranger to geopolitical risk; indeed, war premiums and other insurance-related costs are explicitly written into contracts and reflected by freight rates. But while the cost of freight has responded to recent developments, particularly at the start of October—when Israel and Iran seemed on the brink of open warfare—the tanker market has not mirrored crude price fluctuations. Other fundamentals and factors continue to ensure freight rates are charting their own course amid the conflict. “We