NAT Stock Set For Best Day In 4 Years: Shipping Prices Could Soar On US-Iran Conflict

Retail traders note that the closure of the Strait of Hormuz could raise shipping rates and boost tanker stocks.

• According to the Wall Street Journal, a report noted that Iran’s Islamic Revolutionary Guard Corps has instructed the ships to avoid the Strait of Hormuz.
• Nordic American Tankers' stock jumped 26% on Feb. 28, 2022, when Russia and Ukraine’s war started and sent oil and shipping prices higher.
• Last week, Nordic American Tankers said it expects the tanker market to remain strong in the coming years.

Shares of Nordic American Tankers were 20% higher in overnight trading, likely on track for their best day since February 2022, on reports that Iran is pushing for the closure of the Strait of Hormuz following the U.S. and Israel’s attack on the country during the weekend.

According to the Wall Street Journal, Iran’s Islamic Revolutionary Guard Corps has instructed the ships to avoid the Strait of Hormuz. The Strait is known as an important route connecting several oil producers, a narrow shipping lane considered important to the world's energy markets.

NAT’s Stock Move

Nordic American Tankers' stock jumped 26% on Feb. 28, 2022, when Russia and Ukraine’s war started and sent oil and shipping prices higher. If momentum holds on Monday, the stock is set for its second-best day since then and for its fifth-straight day of gains.

On Sunday, U.S. President Donald Trump said the U.S. military would continue bombing Iran until its objectives are achieved. The operations are expected to continue, and there could be additional American casualties, the President said.

Brent oil surged as much as 13% amid disruptions in the Strait of Hormuz, which could tighten oil supplies. Such major geopolitical disruption usually increases shipping costs as vessels and producers seek an alternative route.

The Wall Street Journal reported, citing U.S. officials, that about a hundred merchant vessels transit the narrow strait every day. Last week, the company said that, should the geopolitical tensions ease, more oil volume should become available for compliant tankers.

Nordic American Tankers said it expects the tanker market to remain strong in the coming years. The supply of tanker tonnage is inelastic in the short term. “When there are too many ships in an area, rates tend to go down. When there is a scarcity of ships, rates tend to go up. Short-term spot tanker rates may be expected to be volatile,” the company said.

What Is Retail Thinking?

Retail sentiment on Nordic American Tankers jumped to ‘extremely bullish’ from ‘bullish’ territory a week ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

A bullish user on Stocktwits said that the stock was “looking super positive.”

Another user on Stocktwits said Hormuz is closed, which will make tanker stocks fly next week.

Shares of Nordic American Tankers have gained nearly 133% in the last 12 months.

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