WhatsApp messages from one firm drive Gulf tanker rates
Sinokor, controlled by a South Korean billionaire, now carries more than a third of the oil passing through the Strait of Hormuz, according to Bloomberg. The shipping industry has always been opaque, but new reporting about the extraordinary surge in the cost of moving Gulf oil to Asia has shed light on how freight rates are set. WhatsApp messages play a surprising role, according to Bloomberg. Sinokor, controlled by South Korean billionaire Ga-Hyun Chung, went on a supertanker buying spree before the war and now carries more than a third of the oil passing through the Strait of Hormuz. The company has been sending brokers details of contracts and rates under negotiation, which have helped inform the global price for shipping crude from the Gulf to China. The practice resembles the 2012 Libor scandal, in which a key interest rate was influenced by a few market participants. As traffic was disrupted by the US-Iran war, the global benchmark received fewer signals. The company publishing the benchmark is now facing a legal challenge, and traders have shifted to another benchmark that tracks shipping costs to Asia from outside Hormuz. Whether some quoted rates were real or not, profits
Sinokor, controlled by a South Korean billionaire, now carries more than a third of the oil passing through the Strait of Hormuz, according to Bloomberg. The shipping industry has always been opaque, but new reporting about the extraordinary surge in the cost of moving Gulf oil to Asia has shed light on how freight rates are set. WhatsApp messages play a surprising role, according to Bloomberg. Sinokor, controlled by South Korean billionaire Ga-Hyun Chung, went on a supertanker buying spree before the war and now carries more than a third of the oil passing through the Strait of Hormuz.
The company has been sending brokers details of contracts and rates under negotiation, which have helped inform the global price for shipping crude from the Gulf to China. The practice resembles the 2012 Libor scandal, in which a key interest rate was influenced by a few market participants. As traffic was disrupted by the US-Iran war, the global benchmark received fewer signals. The company publishing the benchmark is now facing a legal challenge, and traders have shifted to another benchmark that tracks shipping costs to Asia from outside Hormuz.
Whether some quoted rates were real or not, profits have been immense: Saudi shipping giant Bahri reported today a nearly tenfold increase in third-quarter net income to 5.1 billion riyals ($1.36 billion).