Vietnam Ocean Shipping (VOS): Shipping rates may skyrocket in the short term

According to a preliminary assessment by Vietnam Ocean Shipping Joint Stock Company (Vosco, stock code VOS - HoSE), the conflict between Israel and Iran that suddenly broke out on June 13 (Vietnam time) has caused many concerns for the international shipping industry, which has not yet fully recovered from the prolonged turmoil from the Red Sea crisis.

One of the most immediate and visible impacts is the possible re-emergence of war risk surcharges for vessels calling at ports in the Middle East (MEG). This could result in a sharp increase in the cost of shipping goods in the short term, especially for Asia-Europe links or crude oil and liquefied natural gas (LNG) flows through the Gulf and surrounding waters, especially the Strait of Hormuz. About 20% of global crude oil and 25% of global LNG are transported through the Strait of Hormuz.

Some shipowners are considering temporarily stopping calls at ports in areas of tension between Iran and Israel.

Vietnam Maritime Transport said the incident has also made many ship owners more cautious, with some even considering temporarily avoiding ports in the tense area, disrupting supply chains and putting pressure on already overloaded alternative routes. With the conflict in the Red Sea still simmering with no clear end in sight, the risk of disruption to the vital shipping route from Asia to Europe and vice versa continues to increase.

In addition, with Iran being the third largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC), crude oil prices have increased sharply, followed by marine fuel prices.

According to Vietnam Maritime Transport, the 380CST marine fuel swap contract for June 2025 delivery increased by nearly 7% to $477.16/ton in the morning of June 13. Similarly, the price of very low sulfur fuel (VLSFO 0.5%) increased by 5.7% to $537.05/ton from $508.25/ton in the same period.

See more: "Vietnam Ocean Shipping (VOS) finalizes purchase of 2 oil tankers with capacity of over 50,000 DWT" in Industry and Trade Magazine here.

Freight rates for shipping 80,000 tonnes of marine fuel from the Middle East Gulf to Asia are expected to rise by more than 10% from $1.57 million per shipment (as quoted on June 13) as shipowners reassess insurance surcharges and war risk premiums.

Regarding the scenario of the Strait of Hormuz being blocked, Petroleum Securities (PSI) believes that this is a possible scenario but the probability is currently quite low. In the past, Iran has seized oil tankers related to Greece (2022), the US (2023) and container ships related to Israel (2024) during geopolitical tensions; however, the country has never announced the closure of the Strait of Hormuz.

However, PetroVietnam Securities notes that any restrictions on maritime trade in the Gulf and surrounding waters could have long-term consequences, especially if Iran sees a blockade as an effective means of retaliation. Global energy prices such as crude oil, LNG and shipping rates could spike if this scenario occurs.

Israel-Iran conflict erupts, crude oil price could reach $100/barrel