South Korean tycoon Ga-Hyun Chung, vice chairman of Jangkeum Maritime (internationally known as Sinoco), made a colossal $7 billion investment in oil tankers before the U.S.-Israeli strikes on Iran. This highly speculative move, described as one of the boldest bets in shipping history, paid off handsomely after the war erupted, causing the closure and disruption of the Strait of Hormuz. The resulting chaos in global energy markets and crude shipments led to unprecedented daily chartering rates for Very Large Crude Carriers (VLCCs).
Immediately after the U.S. and Israeli attacks on Iran, the average daily rate for a VLCC surged to over $385,000 in March, according to shipbroker Clarksons. Some individual contracts reportedly hit as high as $500,000 per day, marking the highest levels recorded since 2000. Sinoco, under Chung's strategy, is now estimated to control about 10% of the world's VLCCs, operating more than 160 tankers in total, with roughly half of them being VLCCs capable of carrying 2 million barrels of crude oil per voyage. A single VLCC can generate $500 million to $700 million in daily freight revenue at these rates.
Chung strategically positioned VLCCs near or within the Strait of Hormuz before the conflict, utilizing some as floating storage facilities in the early stages to generate additional revenue. When the Strait of Hormuz became unsafe, Asian refiners, cut off from traditional supplies, scrambled for crude from Europe and the U.S., accepting significantly higher freight costs. Sinoco also profited from freight derivatives trading, where rising tanker rates directly translated to higher returns. Part of Chung's capital for these acquisitions reportedly came from Gianluigi Aponte, co-founder of MSC, who amassed substantial cash during the pandemic-driven container freight boom.
While tanker rates have somewhat eased from their peak, they remain considerably elevated above pre-war levels. Industry experts anticipate that complex crude trade routes and a tight vessel supply will sustain high rates. The tentative reopening of the Strait of Hormuz is already boosting demand for ships, including Sinoco's fleet. A recent regulatory filing in Greece indicates an MSC subsidiary has agreed to acquire a stake in Sinoco, suggesting a formalization of their partnership. Chung's bold gamble to amass such a large fleet is believed by industry observers to have been a calculated move to tighten market supply and drive up freight prices.
