Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit

Tanker shipping companies operating VLCCs have benefited from the Iran war as elevated rates and rerouted voyages boost revenue despite lower overall shipping volumes. Frontline PLC reported 67% year-over-year revenue growth in fiscal Q1 2026, with more than 80% of its VLCC days already booked for the second quarter. DHT Holdings posted nearly 135% year-over-year revenue growth and maintains low debt, though its 14.75% dividend yield carries risk with a 124% payout ratio.

During the Iran war, the market’s most reliable winners haven’t been extractors or refiners. Instead, it's the companies that own the tankers setting the market pace, especially those operating Very Large Crude Carriers (VLCCs). VLCCs each haul around 2 million barrels of crude oil per voyage. And, before the conflict began, more than 100 of them would transit the Strait of Hormuz on a normal day. But these are not normal days.

For most companies in the energy sector, relentless unpredictability is a recipe for underperformance. But rampant disruption is actually beneficial to shipping tanker companies that can charge higher rates when routes and timelines are uncertain. Rates are measured in tonne-miles, which is cargo multiplied by distance. Longer voyages increase the fees tankers charge clients, which is on top of a hefty war premium. Rates haven’t yet spiked to March levels, but are still elevated and back on the acceleration.

VLCCs can have breakevens as low as $15,000 per day, so elevated rates for extended periods are huge boosts to shipping company stocks, even if total volumes are much lower. Many Gulf ships have been rerouted around the Cape of Good Hope, causing rates to spike by 30% to 50% to offset longer voyages. And many of these companies are efficiently using higher rates to boost their bottom lines.

Frontline PLC NYSE: FRO operates the largest global shipping fleet with a variety of VLCCs, Aframax, and Suezmax vessels. The company serves trading routes across the Middle East, Asia, the Americas, and Europe, and this strategic positioning enables it to be highly sensitive to rate-market volatility. This was apparent in the company’s fiscal Q1 2026 earnings report, released late May, which showed revenue spiked ...