By expanding its fleet of Very Large Crude Carriers to become the world's largest just before the outbreak of the US-Iran conflict, Sinokor Maritime has emerged as the biggest winner in the global tanker market. The company has reaped enormous profits from its "shuttle service" for tankers in the Strait of Hormuz.

Sinokor Maritime currently operates over 160 tankers, roughly half of which are VLCCs capable of carrying two million barrels of crude oil. Its global tanker market share stands at approximately 17%, commanding 10% of the world's VLCC capacity.

According to a Bloomberg report on July 6, Sinokor vessels handled nearly half of the UAE's crude oil shipments last month. Fortune magazine also reported that Sinokor has been chartering vessels to Abu Dhabi National Oil Company, the UAE's largest energy firm, for "crude shuttle" services since mid-April this year.

Data from Vortexa, a real-time global maritime energy tracking platform, shows that nearly half of the UAE's crude exports were transported by Sinokor vessels. Bloomberg estimates that Sinokor has already made approximately US$60 million to $120 million from just three tankers engaged in shuttle voyages. Last week alone, the company dispatched at least 18 VLCCs into the Persian Gulf region, representing a combined capacity of 36 million barrels of crude.

According to Clarksons data, shortly after US and Israeli airstrikes on Iran commenced, average daily VLCC earnings in March soared to $385,000, the highest level recorded since 2000. Currently, daily charter rates for this vessel type remain elevated at around $500,000.

A $7 Billion Pre-War Bet to Challenge for the Global Tanker Crown

Jung Ga-hyun, Director of Sinokor Maritime and son of Chairman Jung Tae-soon, who also serves as President of the Korea Shipowners' Association, spent approximately $7 billion to assemble the world's largest VLCC fleet—an undertaking virtually unprecedented in the annals of shipping.

Notably, a significant portion of these funds came from Italian shipping magnate Gianluigi Aponte, co-founder of Mediterranean Shipping Company. MSC has already filed for regulatory clearance of a proposed business combination to acquire a 50% stake in Sinokor with Greek competition authorities, and the Korea Fair Trade Commission is also reviewing the transaction.

Sinokor's timing on this wager was exceptionally precise. According to The Wall Street Journal, even before the Strait of Hormuz was blockaded, the company had positioned VLCCs inside the strait in the Persian Gulf region, leasing them out as floating storage in the early stages of the conflict at lucrative rates. At that time, onshore storage facilities were nearing capacity, and market demand for using tankers as temporary crude oil storage surged dramatically.

In a dramatic twist, the bet was widely dismissed by outside observers. Industry veterans initially scoffed at the strategy, reportedly happy to offload vessels in the belief that this new "chaebol" entrant would soon get burned in the cyclical tanker market.

Korean Antitrust Review Underway

The acquisition has recently reached a turning point. According to an exclusive report by South Korea's Maeil Business Newspaper on July 2, the Korea Fair Trade Commission has sent letters to the country's four major refiners—SK Energy, GS Caltex, S-Oil, and HD Hyundai Oilbank—as well as major shipping lines, seeking their input regarding the proposed business combination between Sinokor Maritime and MSC.

The consensus within South Korea's refining and shipping industries is that a successful merger could create monopolistic or oligopolistic influence in the VLCC charter market.

The KFTC has dispatched questionnaires containing dozens of questions to each enterprise to assess the merger's impact on the market. The questionnaire reportedly covers not only the current competitive landscape in the VLCC market but also the combined tanker capacity the two entities would hold post-merger and the potential for exercising pricing power over freight markets.

If the acquisition ultimately secures approval, MSC will enter the tanker sector for the first time, while Sinokor Maritime will gain its first foothold in the containership business.