The bombing of an Iranian consulate in Syria — allegedly by Israel — could mean even more disruption for shipping.

Fearnleys analyst Oystein Vaagen said the bombing, which reportedly killed seven officers, including two generals, could “exacerbate” the situation in the Red Sea.

He said the primary beneficiaries of the disruption in the Red Sea and Gulf of Aden so far have been product tankers and midsize crude tankers, followed by bulkers.

“Moreover, as we’ve previously argued, the longer the situation persists, the VLCC segment should increasingly see positive ‘spillover effects’ through economies of scale, [ship-to-ship transfers], etc,” Vaagen said.

Fearnleys noted that tanker rates have been near record highs, with LR2s averaging $59,000 per day in the first quarter, aframaxes $50,000 per day and MRs $38,000 per day.

Meanwhile, the Baltic Dry Index spent much of the first quarter rising, hitting a 2024 high of 2,419 per day on 18 March before cooling to 1,821 per day on 28 March.

On Monday, an airstrike in Damascus destroyed a building next door to Iran’s embassy.

Israel has not taken responsibility for the attack, but it has conducted airstrikes in Syria since the 7 October Hamas attack.

Iran and Syria condemned the bombing. Syrian foreign minister Faisal Mekdad called it an “atrocious terrorist attack” that killed several innocents, while Tehran has promised to retaliate.

Among the dead was Brigadier General Mohammad Reza Zahedi, a senior commander in the Iranian Revolutionary Guard Corps-Quds Force, which is responsible for unconventional warfare and foreign operations.

Iran has ties to Hamas and Yemen’s Houthis, who have launched attacks on commercial ships in the Red Sea since mid-November, ostensibly to force Western powers to boost humanitarian aid to Gaza.

At first the attacks targeted ships with ties to Israeli owners or heading to Israel, but quickly grew in scope and have forced vessels to avoid the area altogether and head south around the Cape of Good Hope, boosting rates as effective fleet supply dwindles.

Download the TradeWinds News app
The News app offers you more control over your TradeWinds reading experience than any other platform.