Frontline and other tanker stocks rose on the Oslo Stock Exchange on Wednesday.
John Fredriksen’s Frontline gained as much as 5.8% in the Norwegian capital.
“Clearly a chaotic situation, but energy and shipping names are reacting.
“Comments around a potential energy infrastructure attack on Iran have been made, which would be a net positive for (crude) tanker names — provided that a full-scale war and/or oil price surge (into demand destruction territory) does not occur,” Pareto Securities analysts Eirik Haavaldsen and August Klemp said in a note.
VLCC owners, such as Frontline, DHT Holdings and Teekay Tankers, all rose on the New York Stock Exchange on Tuesday after the attacks by Iran.
The price of Brent crude has jumped to around $76 per barrel from $72 before the attacks.
“First, Opec+ should be able to compensate for Irani barrels lost, and this would boost demand for ‘legit’ ships at the expense of ‘dark’,” the analysts said.
“Second, the highly uncertain geopolitical situation could spark storage demand (inventory building), which also would raise demand for vessels,” they added.
In Oslo, Okeanis Eco Tankers rose 5.9% while Hunter Group was up 4.7%.
“In short, this highlights how fragile the value chain in reality has become, and a war risk premium should in our view be included in the tanker names (and surely not a discount, like we have been seeing recently),” Pareto said.
On another note, Clarksons Securities said rising tensions in the Middle East along with higher oil prices could boost shipping activity.
“Speculation about tighter sanctions on Iran, whose oil is largely transported by the shadow fleet, could potentially drive up demand for regular tankers. Tanker equities have moved higher, but we believe they remain attractively valued,” Clarksons said.
The shares of product tanker owners showed more modest gains. Hafnia rose as much as 3% in Oslo.
