Strait of Hormuz conflict drives record high first-quarter profits, cruise line operators worry about market collapse ahead

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Deep Tide TechFlow News, June 6th, according to the Financial Times, due to the outbreak of war in February this year and Iran's blockade of the Strait of Hormuz, the global oil transportation industry achieved a record profit of 36 billion USD in the first quarter. However, as the United States and Iran negotiate to reopen this critical route, oil tanker owners are facing the risk of freight rates plummeting and market collapse.

Blocked waterways have caused over 160 oil tankers to be stranded in the Persian Gulf, and limited capacity has once pushed the daily rental rate of large oil tankers up to 386,685 USD. As the route is expected to reopen soon, daily rental rates have fallen back to between 55k and 95k USD in recent weeks, but still remain higher than the average of 30k to 40k USD in previous years.

Alexander Saverys, CEO of major shipping company CMB Tech, warned that the industry has blindly invested huge profits into new ship orders, with this year's orders for large oil tankers reaching a record high. Once the strait reopens and capacity is released, the surplus ships will trigger cyclical catastrophic crashes in the shipping industry. Currently, global oil tanker assets are mainly dominated by Greek shipowners, with an operational fleet valued at 66.4 billion USD.

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