A weekly thread to discuss financial matters - from personal all the way up to global.
Ground Rules
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- Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
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Notes -
It's never been better to be a Greek shipping magnate with some balls. The rates that oil tankers are making is unheard of.
The break-even rates for a VLCC (very large crude carrier) is something like $30,000/day. Last year, the market was already tight. I was pretty happy when a tanker company I invest in signed a year-long contract at $74,000/day.
Now, I really wish they hadn't. The rates for a year long charter are more than twice the rate from last year. But what's really crazy is what tankers are earning when they sail from the Gulf of Oman (just outside the Hormuz) to China. The rate is now over $400,000/day. A round trip voyage takes over 40 days. They can make $20 million for a single voyage. A newbuild VLCC costs $130 million and lasts 20-30 years. Ship owners can earn this back in a single year. Insane.
But back to the big ball Greeks.
There's another market that is even more lucrative: The Hormuz trade. This involves sailing a smaller ship into the Hormuz, grabbing oil, and then out again, doing a ship-to-ship transfer in the Gulf of Oman. I have no idea what they are making but it's obscene. It's possible they are paying for their vessel with every voyage. Fuck insurance. What's the point? And Iran's attacks are pretty weak. When a ship is attacked, it rarely does serious damage. They haven't sunk one in ages as far as I know. People are making generational wealth. I hope the crew is compensated adequately.
To provide plausible deniability for back-channel diplomatic goals.
In this case, "stop shipping and claim it's too risky as an excuse to try and extract a diplomatic concession from the Americans".
The risk is now priced in: a company may now buy a whole new ship if the Iranians sunk one (and provide their now-merchant marines appropriate hazard pay, but that's a drop in the bucket compared to that pricetag).
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