Ardmore's tankers won't pass Strait of Hormuz; spot deal with Rongsheng canceled: sources

MR tankers' major Ardmore Shipping Corp. will not move its ships through the Strait of Hormuz due to the prevailing geopolitical situation, two sources with direct knowledge of the matter said.

A company MR tanker, the 10-year-old and Marshall Islands-flagged Ardmore Seahawk, was scheduled to load a naphtha cargo in the Persian Gulf after ballasting from East Asia and then undertake a voyage for North Asia. However, the company has communicated to the charterer, Rongsheng, that the fixture cannot be executed in the prevailing circumstances arising out of the escalating conflict, the two sources said.

Such moves by key tanker companies can reduce the supply available for loading in the Persian Gulf, at a time when freight is already gaining support from severe congestion amid fewer hours of operations, because port and navigation activity reduces to a trickle during the night.

An official at Ardmore Shipping declined to comment.

If the Ardmore Seahawk had continued the ballast to the Persian Gulf, by now it would have reached Fujairah, but Bermuda-based Ardmore decided that its tankers would "not pass the Strait of Hormuz, for now," one of the sources said. Ardmore has at least 16 MRs and half a dozen other tankers, which load cargoes worldwide.

Ardmore currently does not have any of its tankers in the Persian Gulf, sources said.

However, market participants tracking such spot deals said that several other tanker companies continue to operate in the Persian Gulf.

Platts, part of S&P Global Commodity Insights, spoke with sources in Shanghai, UAE, Copenhagen, Singapore and Tokyo to check on loading plans in the Persian Gulf after tensions in the region escalated over the weekend.

Another MR, the Torm Strength, is currently passing through the Strait of Hormuz, a UAE-based shipping executive said. Denmark's Torm is one of the world's largest clean tanker companies by fleet size.

Another source in Shanghai said that Nanjing's Hong Kong-registered tanker, the Qian Chi, is also crossing the Strait of Hormuz.

Sources in Denmark said that Rome-based d'Amico Shipping's tankers are also calling the Persian Gulf for now.

The Strait of Hormuz has become one of the most tracked locations in the world since June 12, after the onset of hostilities between Israel and Iran, all the more so following the US intervention at the weekend. If the Strait of Hormuz is closed, oil prices can potentially spike exponentially, but tanker freight can nosedive because they will not have many cargoes to load, and Iran's cash flow will be hit as its US-sanctioned oil will find it difficult to reach destinations such as China.