Korean shipping tycoon who bet $7b on tankers emerges as one of biggest winners of Iran war

A South Korean shipping executive who assembled a massive tanker fleet just before the United States and Israel struck Iran has emerged as one of the biggest beneficiaries of the Middle East conflict, analysts say. His strategy of securing vessels ahead of the war paid off as the closure of the Strait of Hormuz and disruptions to crude shipments sent freight rates surging.

The Wall Street Journal reported Thursday that Jeong Ga-hyeon, vice chairman of South Korean shipping company Jangkeum Maritime — known internationally as Sinoco — and eldest son of Chairman Jeong Tae-sun, invested roughly $7 billion (approximately 9.5 trillion won) to build one of the world's largest tanker fleets before the US-Israeli strikes on Iran.

According to the WSJ, Sinoco is estimated to control about 10 percent of the world's very large crude carriers, or VLCCs. The company operates more than 160 tankers, roughly half of which are VLCCs capable of carrying 2 million barrels of crude oil in a single voyage.

One of the tankers in the fleet, the Plata Carrier, recently passed through the Strait of Hormuz loaded with 2 million barrels of crude and is heading to India. The vessel had remained in the Persian Gulf for more than four months before making the transit.

Before the war, the Strait of Hormuz carried roughly 20 percent of the world's seaborne crude oil. Once the strait was blocked or made unsafe by the conflict, Asian refiners scrambled to secure crude from Europe and the United States, accepting sharply higher freight costs.

The surge in tanker demand pushed freight rates to record highs.

According to shipbroker Clarksons, the average daily rate for a VLCC in March — immediately after the US and Israeli strikes on Iran — hit $385,000 (approximately 520 million won). Some contracts were reportedly struck at around $500,000 per day, the highest level since 2000.

At those rates, a single VLCC can generate 500 million to 700 million won in freight revenue per day. For a company like Sinoco with around 80 VLCCs, daily freight income from vessels at sea can run into the tens of billions of won.

The WSJ reported that Jeong had positioned VLCCs near the Strait of Hormuz before the war and, in the early stages of the conflict, leased some vessels as floating storage facilities to generate additional revenue.

Other vessels shuttled through the Strait of Hormuz to ports outside the Persian Gulf, absorbing demand from crude shipments bound for Asia.

Sinoco also profited from freight derivatives trading. Because the contracts are linked to freight rates, rising tanker rates translate directly into higher returns.

Part of the capital behind Jeong's large-scale vessel acquisitions reportedly came from Gianluigi Aponte, co-founder of MSC, the world's largest container shipping line. Aponte amassed substantial cash reserves during the COVID-19 pandemic when container freight rates spiked.

The precise structure of the two men's partnership has not been disclosed, but recent filings with the Athens Stock Exchange show that an MSC subsidiary agreed to acquire a stake in Sinoco.

Sinoco was founded in 1989 by Jeong's father in a joint venture with Chinese companies. It grew alongside expanding trade between South Korea and China and has aggressively built out its tanker business since the pandemic.

Industry observers say Jeong made his bold move on the calculation that amassing a large fleet would tighten market supply and push freight rates higher.

Such large-scale bets in the shipping market carry significant risk, however. A Taiwanese shipping operator known as Nobu Su made a fortune cornering the bulk carrier market in the 2000s, but later applied the same strategy to tankers and was wiped out by the global financial crisis.

For now, though, the consensus is that Jeong's gamble has paid off. Freight rates have pulled back somewhat from their early-war peaks but remain well above peacetime levels. Industry insiders expect elevated rates to persist, as crude trade routes have grown more complex and vessel supply remains tight.

The Strait of Hormuz has begun to reopen, but traffic has yet to fully normalize. Some in the industry say a sudden release of pent-up crude shipments could drive even greater demand for Sinoco's vessels.