Full Breakdown
Freight Tanker ETF Soars as Middle-East Tensions and Global Vessel Shortages Drive Prices
By Drooid · · How we work
Background & Context
The U.S.–Iran conflict has tightened the Strait of Hormuz, prompting Iran-backed Houthi rebels to seize Yemen’s port of Mocha and Saudi Arabia to shut its east-west crude pipeline after drone attacks from Iraq. At the same time, tariffs, drought-induced low water levels in Panama and Europe, and a shortage of available ships have forced carriers onto longer, costlier routes. Analysts describe this convergence of geopolitical choke points and structural vessel scarcity as “weaponized trade routes” that have become a new norm for freight markets.
Data & Statistics
- The Breakwave Tanker Shipping ETF (BWET) is up roughly 3,600 % year-to-date (through early September).
- Freight rates on Middle-East tanker routes have risen close to 500 % year over year.
- Companies are paying up to 300 % more than pre-crisis prices for the limited ships that remain.
- Project44 reports 140,276 shipping disruptions this year, with weekly disruptions peaking at over 9,000 versus a pre-war baseline of about 1,000.
- Over 200 vessels are under construction worldwide, a supply that will not enter service for 18–36 months.
- Competing freight ETFs show strong returns: SEA (sea-air mix) up 42 %, BOAT (global shipping) up 70 % YTD, but BWET’s narrow focus on oil-tanker futures remains the most extreme bet.
Official Statements & Responses
John Murillo, chief business officer of B2BROKER, notes that BWET tracks the cost of moving oil rather than oil prices themselves, emphasizing the fund’s sensitivity to geopolitical events. Eric Fullerton of Project44 warns that the high volume of disruptions is likely to persist, describing the current environment as a “meaningful negative balance” that could usher in an industry down-cycle once new vessels arrive.
Verbatim Quotes
- “It has very little to do with the oil price itself or its actual volume and depends mainly on geopolitics,” — Iraq. John Murillo, chief business officer of B2BROKER
- “Companies are jumping at prices that might be 300 percent higher than they were paying, but that is the only ship available,” — Kyle Peacock, principal
- “This is twice in the past three years either governments or groups have weaponized trade routes for geopolitical gain. We have never seen that before,” — Eric Fullerton, vice president of product marketing at Project44, a supply chain intelligence platform
- “We are looking at an incredibly high volume of disruptions that are concerning,” — Eric Fullerton, vice president of product marketing at Project44, a supply chain intelligence platform
- “These are very strategic negotiation tactics for these groups and countries, so the fear is that governments and groups will continue to target the supply chain to increase their negotiating power for geopolitical events,” — Eric Fullerton, vice president of product marketing at Project44, a supply chain intelligence platform
- “A lot of air cargo is experiencing the same thing ... right now cargo is more profitable than passengers,” — Kyle Peacock, principal