Orkim Warns Shipping Disruption After Iran War

Context

Sin Bi Cheah, chief executive of Malaysia’s Orkim Group, signalled heightened operational and market risk for clean petroleum product and LPG carriers on Mar 26, 2026 at Asia‑Pacific Maritime 2026 (Bloomberg, Mar 26, 2026). His comments reflect a near‑term transmission mechanism from geopolitical conflict in Iran to ship routing, insurance costs, and ultimately regional product flows. Orkim is a regional tanker operator focused on clean petroleum products and liquefied petroleum gas — segments particularly sensitive to rerouting and port diversions. For institutional investors, the practical consequence is not limited to freight volatility: changes to ton‑mile demand, fuel consumption, and chartering patterns can alter cash flows across operators, refiners and commodity traders.

The shipping industry is structurally exposed: UNCTAD reported that seaborne trade accounts for roughly 80% of global merchandise trade by volume (UNCTAD, 2024), underscoring how localized chokepoints transmit disruptions. The Strait of Hormuz remains a critical node — the International Energy Agency estimated that approximately 20% of seaborne oil exports transit the strait (IEA, 2023), a figure that makes risk perceptions here disproportionately influential on global energy prices and tanker economics. Orkim’s public comments echo a broader pattern: when chokepoints are perceived as compromised, market participants re‑price risk not only for vessels physically present but also for the forward contractual network that depends on timely deliveries. The next sections quantify those channels and outline what institutional investors should monitor.

Data Deep Dive

Publicly available metrics illustrate the scale of exposure. First, the Bloomberg clip of Orkim’s CEO reflects industry sentiment on Mar 26, 2026 and directly references clean product and LPG logistics (Bloomberg, Mar 26, 2026). Second, UNCTAD’s 2024 data point that roughly 80% of trade by volume moves by sea helps explain why a regional shipping shock propagates quickly into supply chains (UNCTAD, 2024). Third, the IEA’s 2023 assessment that ~20% of global seaborne oil exports transit the Strait of Hormuz clarifies the sensitivity of energy flows to any reduction in throughput (IEA, 2023). These three concrete references frame the quantitative backdrop for route‑level analysis.

To translate those figures into operational impact, it is useful to consider voyage geometry and ton‑mile economics. For a simple exemplar, a clean product voyage from the Arabian Gulf to Southeast Asia that transits the Strait of Hormuz and the Malacca‑Singapore approach is typically a 6–12 day round‑trip operation depending on load/discharge points; re‑routing around the Cape of Good Hope adds thousands of nautical miles and can add 7–14 days to voyages (industry route estimates, Clarksons Research range 2019–2025). That delta increases bunker consumption and time‑charter equivalent costs materially: even a 10–20% increase in voyage time and fuel use can compress margins on spot clean product voyages that historically operate on single‑digit percentage spreads between voyage revenue and cost.

Insurance and war‑risk premiums are another measurable channel. Historical precedent is informative: after the 2019 tanker tensions in the Gulf, industry reporting found war‑risk premiums spiked materially — in some cases tripling on affected voyages (Reuters, 2019). While exact premium moves are contract‑ and operator‑specific, underwriting repricing can add several hundred to several thousand dollars per day on time charters and escalate voyage expenses on fixed‑rate contracts. For publicly listed tanker owners and oil traders, those cost increases filter down into earnings volatility; for non‑listed owner‑operators like many regional product carriers, they directly affect cash margins and fleet deployment decisions.

Sector Implications

Clean product and LPG carriers — Orkim’s core exposure — behave differently to crude tankers in stress scenarios. Clean tankers are generally smaller, operate on shorter voyages, and are more tightly coupled to refinery output and regional demand cycles. A sustained disruption that incentivises longer voyages raises tonne‑mile demand (favourable for some shipowners) but simultaneously raises fuel and time charters, which disproportionately hurts smaller operators with tight working capital. There is also a countervailing effect: longer voyages can increase demand for tonnage and push spot rates up, but that benefit may take time to reach owners operating under long‑term contracts.

Comparatively, larger crude tankers (VLCCs) have different elasticity: rerouting can lift charter rates quickly for long‑haul crude voyages, yet the pool of vessels available is larger and financing structures are more resilient in many public companies. From a peer analysis perspective, regional product tanker owners with higher leverage and shorter contract durations are more exposed than integrated oil companies or large listed tanker operators with diversified fleets. For refiners and traders in Southeast Asia, tightness in product flows raises basis risk versus international benchmarks (e.g., Singapore product spreads), potentially widening differentials versus global benchmarks by several dollars per barrel until routings normalize.

Macro‑commodity knock‑on effects are measurable. If shipments through Hormuz decline materially or are perceived as insecure for weeks, spot crude and refined product prices can react — historically these reactions have ranged from single‑digit percent moves to double‑digit spikes in acute episodes. That price volatility reverberates into hedging costs and working capital requirements for downstream participants. Institutional portfolios with exposure to shipping equities, freight derivatives, and commodity inventories should therefore model scenarios with higher voyage costs, elevated insurance premia, and delayed cargo cycles.

Risk Assessment

The probability and persistence of the Iran war’s maritime consequences are the central risk variables. Short‑lived flare‑ups typically produce acute but transient rate spikes and insurance repricing; protracted disruptions transfer more structural risk into fleet deployment and trade patterns. Counterfactuals matter: a rapid de‑escalation could see freight premia unwind within weeks, while sustained hostilities that trigger interdiction or mining would force longer re‑routing, port closures, and potentially sovereign countermeasures. Market participants should monitor on‑the‑water indicators (AIS density in the Gulf, port throughput statistics), insurance market notices, and chartering desks’ counter‑offer behaviour for early signals of persistence.

Operational risk is another layer: crew safety and compliance with increasingly complicated routing advisories can force commercial slow‑steaming, regulatory detentions, or cascading delays at load/discharge windows. Regulatory risk includes sanctions regimes and 'secondary sanctions' interpretations that affect counterparties, traders and banks. Financial risk follows: margin calls on charterers and traders can amplify price moves if counterparties are forced to liquidate positions into stressed markets. Credit exposure to mid‑sized owners that rely on short‑term charter revenue to service debt is a specific vulnerability in many portfolios.

A final risk bucket is reputational and ESG‑linked: owners and charterers that choose to reroute or to continue operations in perceived high‑risk zones can face scrutiny from customers and insurers. For institutional investors, this elevates the importance of integrating operational risk metrics, insurance exposures, and jurisdictional sanctions checks into counterparty assessments.

Fazen Capital View

Fazen Capital’s perspective diverges from the immediate 'flight to safety' narrative in two respects. First, markets often overshoot on the downside for vessel operations but under‑price the structural re‑routing benefits to large, flexible tonnage owners. In other words, shorter‑term pain for regionally focused product carriers may coincide with longer‑term reallocation benefits for diversified fleets that can capture higher tonne‑mile demand. This is not a directional trade recommendation, but a strategic observation about who wins and who loses under sustained disruption: scale, access to alternative employment, and low leverage matter more than short‑term rate spikes.

Second, we see a non‑obvious risk: supply‑chain substitution. If product flows to Southeast Asia are repeatedly disrupted, buyers may accelerate procurement diversification (e.g., increased imports from other refining hubs), which could permanently alter regional trade lanes and demand for certain vessel types. That structural shift would benefit owners positioned to capitalise on new long‑haul trades and harm owners concentrated in short, intra‑Asia legs. Institutional investors should therefore evaluate not only current P&L sensitivity but also convexity to plausible structural rerouting outcomes. For further sector context and related research, see our insights on topic and related shipping analyses on topic.

Bottom Line

Orkim’s warning on Mar 26, 2026 highlights a clear transmission channel from Iran conflict to clean tanker economics, insurance costs and regional product flows; the materiality depends on duration and maritime incident risk. Investors should monitor AIS movements, insurance market notices, and regional throughput data to quantify operational persistence.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.

FAQ

Q: Could re‑routing add a permanent premium to product tanker earnings?

A: It depends on duration and demand elasticity. Short‑term rerouting tends to create transitory spot rate spikes; sustained rerouting can increase long‑term tonne‑mile demand and lift the earnings baseline for certain vessel types, but may simultaneously incentivise trade pattern shifts that neutralize some gains over 6–24 months.

Q: How quickly do insurance costs react and where can investors see those moves?

A: Insurance and war‑risk premiums can reprice within days after an incident; visible signals include hull & machinery endorsements, war‑risk notices on chartering platforms, and broker reported 'extra' daily premium figures. Historical episodes (e.g., 2019 Gulf tensions) showed premiums jump rapidly — in some reported cases up to threefold on affected routes (Reuters, 2019).