“Middle East escalation driving shipping rates”

In a comment regarding the latest developments in the Middle East, Mr. John Kartsonas, Managing Partner of Breakwave Advisors said that “shipping historically has benefitted from geopolitical turmoil. The urge to secure energy supplies is the first thing in mind of traders when wars or conflicts begin. Tanker rates have rallied in the last two days following the events in the middle east. As an example, the core supertanker spot rate is up more than 200%.

Although oil disruptions have been minimal, the fear of the potential escalation causes traders to book ships thus driving shipping rates higher. Obviously, there are a lot of unknowns on what the future will look like, but any escalation is going to move tanker rates even higher. The five-year high on the core supertanker segment is about 300,000. We currently stand at roughly 20,000-25,000. This time last year, without any geopolitical issues, shipping rates for that segment were 70,000-80,000.

The potential here is significant. BWET is 90% exposed to the core supertanker segment through futures,” Mr. Kartsonas concluded.

From 2011 to 2017, John was a Senior Portfolio Manager at Carlyle Commodity Management, a commodity-focused investment firm based in New York and part of the Carlyle Group. He was responsible for the firm’s shipping and freight investments. During his tenure, he managed the one of the largest freight futures funds globally. Prior to this role, John was a Co-Founder and Portfolio Manager of Sea Advisors Fund, an investment fund focused on shipping. From 2004 to 2009, John was the leading Transportation Analyst at Citi Investment Research covering the broader transportation space including shipping. Prior to that, John was an Equity Analyst focusing on shipping and energy for Standard & Poor’s Investment Research. John sits on the Board of Seanergy Maritime, a publicly-traded dry bulk shipping company. John received his MBA from the Simon School of Business, University of Rochester.
Source: Breakwave Advisors’ John Kartsonas