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Notes -
I saw a picture earlier purporting to show tons of sea traffic going around the Horn of Africa, supposedly rerouted from the Straight of Hormuz.
If we assume the SoH is going to be fully closed long-term, so that people adjust and buy into the next best marginal shipping pattern, what would the actual long-term consequences be? Are we talking more like a 15% increase in shipping costs or 200%?
It's hard to separate from the effects of a significant portion of the global fleet being stuck inside the Persian Gulf, but currently VLCC day charter rates are more like 200% higher than usual.
Baltic Dry (an index of charter rates for ships hauling coal and grain and similar things) is barely above 2026 averages.
Container rates seem to similarly only be slightly affected.
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