Shares of the maritime services provider, which gets 87% of its revenue from its tanker business, gained as much as 14% in September through Friday's close. Teekay is giving back some of those gains today -- down 2.9% through 10:55 a.m. But why was Teekay stock up in the first place?
Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase.
"Act 2" is the global rollout. Continue » Tanker rates are the reason. StreetInsider.com reports that the cost of chartering a Very Large Crude Carrier (VLCC) supertanker passed $1 million per day yesterday.
That's up 5 times from what chartering a supertanker cost before the Iran war began Feb. 28. The Baltic Dirty Tanker Index (BAID) makes it easy to track this rise. While it doesn't show precise dollar rates, the BAID uses a "point" system similar to the Dow Jones Industrial Average.
The index closed just below 2,000 before the war, hit 2,421 at the beginning of September -- and has gone vertical this month, more than doubling to 5,092. StreetInsider attributes the rate spike to "a near-shutdown of Hormuz traffic" that is slowing tanker traffic and making it harder to charter tankers. So what's changed to make Teekay stock slip today? reports that Iran offered over the weekend to reopen the Strait of Hormuz "within seven days" if the United States Navy lifts its blockade of Iranian shipping.
If this happens, oil should start moving again, and tankers will become easier (and cheaper) to charter. But this isn't the first time rumors that the Iran war is about to end have pushed oil stocks lower! The rumors might prove true this time -- or they might not.
Extract — continue reading at the source.
