The ongoing conflict between the US and Iran, which began on February 28, 2026, has significantly disrupted maritime traffic in the Strait of Hormuz. On September 10, only seven ships traversed the strait, compared to a daily average of approximately 125 vessels before the war. This reduction in traffic, coupled with rising insurance costs and the closure of the Saudi Arabian East-West pipeline, has caused shipping rates to surge.
Four US-listed shipping ETFs are currently capitalizing on these market conditions, managing a combined total of less than $450 million. The Breakwave Tanker Shipping ETF (BWET) has seen the most significant growth, rising more than 3,200% this year. Since the start of the conflict, the fund has gained 1,300%, with shares trading near $781.92 on Monday, compared to a 52-week low of $13.58.
Other funds in this niche category have also recorded gains over the past year. The Breakwave Dry Bulk (BDRY) ETF is up approximately 95%, while SonicShares Global Shipping (BOAT) and US Global Sea to Sky Cargo (SEA) have increased by 69% and 45%, respectively. These funds utilize different strategies, with BWET and BDRY holding freight futures, while BOAT and SEA invest directly in shipping companies.
The spike in shipping costs has impacted global energy prices, with Brent crude rising 3% to over $110 per barrel. In the United States, diesel prices have reached record highs, exceeding $6 per gallon in 28 states. Experts note that any normalization of the situation in the Strait of Hormuz would likely lead to a decline in freight rates and negatively affect the performance of these specialized ETFs.
