A Mediterranean Shipping Company (MSC) container ship sailing off the southeast coast of the French Mediterranean off Marseille on April 7, 2026 (Photo by Thibaud MORITZ/AFP, Getty Images)
Thibault Moritz | AFP | Getty Images
The months-long crisis in the Strait of Hormuz has turned an overlooked corner of the market into one of the hottest trades of 2026, sending shipping stocks to their highest level in more than a decade.
The basket of 35 publicly traded U.S. and European shipping stocks tracked by Lloyd’s List Intelligence has risen about 68% this year, more than five times the gain of the S&P 500 and 82% over the past 12 months. Oil tanker stocks led the rally, up 120% since the start of the year, followed by car carriers, gas carriers and dry bulk shippers, according to Lloyds data.
“Shipping is a kind of hedge against geopolitical instability,” said Andreas Povlsen, managing director at Hayfin Capital Management. He noted that the cargo market has benefited from fluctuations such as the COVID-19 pandemic, the Houthi offensive in the Red Sea, and Russia’s invasion of Ukraine.
Investors are already pouring into the long-shadowed maritime sector, seeking exposure to downstream commodity supply chains and cash-generating real assets. Then the Iran War began, causing massive disruption to the Strait of Hormuz, once one of the world’s busiest oil shipping routes. This is forcing tankers to take longer routes, raising insurance costs and tightening the effective supply of ships even as global trade continues.
Breakwave Tanker Shipping ETF
Danaos Corporation The stock is trading at its highest since 2008 after rising 60% this year, according to LSEG data. container operator Frontline PLC and tkei tankers It hasn’t been this expensive since 2011. BW LPG It remains on record. safe bulk carrier and Navios Maritime Partners While recording a peak for the first time in several years, international routes Last week it hit an all-time high.
The Breakwave Tanker Shipping ETF, which trades near-dated crude oil tanker forward cargo contracts, is up 650% since the Middle East wars began in February and more than 2,300% this year.
“Shipping now needs to go further and tonne miles are increasing,” said Nicholas Tiloglas, CEO of Tufton Investment Management, a London-based asset management firm focused on this sector, adding that this was driving demand for oil tankers, chemical tankers, dry cargo bulkers and gas carriers.
“Even if the Iran conflict ends, the situation is unlikely to return to the pre-war status quo,” Tilogalas said. He said countries tend not to go back once they find alternative suppliers, but instead diversify to manage the risk of future disruption.
“Fear pricing”
Not all bull markets last, said John Kartsonas, founder and managing partner at Breakwave Advisors, which manages two shipping ETFs, including BWET.
He said: “A significant portion of this premium is just fear pricing and will quickly wither away the moment Hormuz looks normal again.” This cycle is about geopolitics and inefficiency (long-haul routes and stranded ships), but “not real new demand for maritime trade.”
Even before the Middle East wars and their resulting impact on the Strait of Hormuz, the tanker and dry bulk markets were already poised for a strong 2026 after a decade of underinvestment, said J. Mintzmeyer, founder and president of Value Investors Edge. He sees dry bulk as best placed if disruptions persist, with ship supply likely to increase from 2027 to 2030 if rates remain high.
The Iran war “poured gasoline on the fire of an already strong market,” he said.
