By Ben Levisohn

Iran appears to have effectively closed the Strait of Hormuz in response to U.S. and Israeli attacks on the county. While that could cause oil prices to spike, it could be good news for shipping stocks, including Frontline and DHT Holdings.

The Wall Street Journal reported Saturday that Iran's Islamic Revolutionary Guard Corps, or IRGC, has warned ships not to travel through the Strait of Hormuz, a major shipping corridor, especially for the transportation of oil. According to OPIS' Energy Markets team, 26% of the crude oil trade and 23% of liquefied natural gas goes through the strait, and a prolonged closure could cause oil prices to surge even higher.

Major escalations have historically caused shipping rates to spike, according to Evercore analyst Jonathan Chappell. In a report published last year, he noted that "very large crude carrier" prices spiked more than 40% at the start of the first Gulf War in 1991, and by as much as 304% during the second Gulf War, though that was complicated by China's entry into the World Trade Organization.

Tanker stocks, as a group, have already started to reflect the possibility of this outcome. Ardmore Shipping has gained 55% this year, while DHT Holdings has climbed 60%, Frontline has surged 74%, Nordic American Tanker Shipping has soared 67%, Scorpio Tankers has risen 56%, Teekay Tankers has advanced 47%, and TORM PLC. is up 54%. The S&P 500 has risen just 0.5% in 2026.

The higher rates have already shown up in earnings. Frontline, which reported results on Friday morning, has "booked 92% of its 1Q26 VLCC spot days at an average rate of $107,100/day...[which] would represent the highest since the heydays of 2Q08," Chappell wrote after the release, while raising his price target to $42 from $31. "Still, FRO is the alpha male of the crude tanker market and retains material exposure to a spot market that has been leaping to all-time highs of late. Consequently, our estimates for the near term are likely to remain conservative until the tanker spot market comes back to earth. Until that time, FRO is likely to retain upside equity appreciation potential."

Until it doesn't.

Write to Ben Levisohn at ben.levisohn@barrons.com

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February 28, 2026 13:27 ET (18:27 GMT)

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