Middle East conflict lifts shipping stocks; SCI, GE Shipping shares rise up to 10%

Strait of Hormuz, a narrow chokepoint just 21 miles wide, is vital for global energy supply

Indian shipping stocks were in high demand on June 13, outperforming a weak broader market, as escalating tensions in the Middle East sparked fears of global trade disruptions and rising tanker rates. Shares of Shipping Corporation of India and GE Shipping surged up to 10 percent, emerging as top gainers on the Nifty 500 index.

Investor appetite for shipping counters remained strong amid expectations of higher freight and tanker rates, as ships are likely to reroute to avoid the increasingly volatile Strait of Hormuz — critical artery for global oil and gas transport.

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The Israeli pre-emptive strike on Iran's nuclear sites — which reportedly killed several top commanders and scientists — comes just as the two-month deadline set by US President Donald Trump for a nuclear deal with Iran expired. The UN nuclear watchdog had recently passed a resolution accusing Iran of violating non-proliferation commitments, prompting Iran to pledge an acceleration in its nuclear program.

The Strait of Hormuz, a narrow chokepoint just 21 miles wide, is vital for global energy supply — handling nearly 30 percent of seaborne oil and 20 percent of global LNG. Any threat to this passage could send oil and freight prices soaring. Although Iran has long threatened to shut the strait, doing so would severely damage Gulf economies and strain its trade ties with China — a key oil customer.

For India, any disruption or closure of the Strait of Hormuz can impact oil prices and shipping costs. Since India imports over 80 percent of its crude oil—much of it from Gulf nations like Iraq, Saudi Arabia, UAE, and Kuwait—any blockade of this key maritime route would tighten global oil supply and send crude prices soaring.

Shipping costs would also shoot up, as tankers would need to take longer routes around Africa or avoid the region altogether, reducing vessel availability and pushing freight rates higher. Wile this would be a concern for importers and the overall economy, shipping companies like Shipping Corporation of India and GE Shipping could benefit from the spike in tanker rates.

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