Iran approved the blockade of the Strait of Hormuz on the 22nd (local time), causing shipping-related stocks to surge. The rapid rise in maritime freight rates appears to reflect expectations that the revenue of shipping companies will be maximized.

A crew member of a Korean vessel sailing in the Strait of Hormuz captures a scene of a missile launch./Courtesy of the National Federation of Marine Workers' Unions.

As of 9:06 a.m. on the 23rd, Heung-A Shipping is trading at 2,235 won, up 304 won (15.74%) from the previous trading day. Korea Line Corporation gained 202 won (12.09%) to 1,873 won, and HMM rose by 1,400 won (6.09%) to 24,400 won. Additionally, shipping-related stocks such as Pan Ocean and KSS LINE are also showing upward trends.

In fact, as the possibility of a blockade of the Strait of Hormuz arises, maritime freight rates are also rising rapidly. Freight rates on the Gulf-Asia route for very large crude carriers (VLCC) have surged over 20%. During the COVID-19 pandemic, the stock prices of shipping companies rose significantly due to logistics bottlenecks.

Iran has resolved to block the Strait of Hormuz in response to U.S. bombings. The Strait of Hormuz is a key maritime route through which 25% of global crude oil consumption and about 20% of LNG supply pass.