Frontline CEO confirms halt to new charters via the Strait of Hormuz, existing vessels to exit under naval convoy protection
Frontline Ltd., the world’s largest publicly listed oil tanker company, has suspended all new charter agreements for routes through the strategic Strait of Hormuz. CEO Lars Barstad announced the decision on June 13, attributing it to significantly elevated security risks following Israel’s airstrike on Iranian facilities in early June.
The Strait of Hormuz is a vital maritime chokepoint, responsible for roughly 25 percent of global oil supplies and approximately one-third of liquefied natural gas flows. Existing Frontline vessels in the Gulf region will now be rerouted to sail under international naval escort as convoys, with enhanced security measures and increased insurance costs factored into operations.
Greece and the United Kingdom have issued formal advisories to their ship registries. They urge owners to avoid the Gulf of Aden and Red Sea, and to log all voyages through the Strait of Hormuz, citing a rapidly evolving regional security environment. The UK also advised vessels under the Red Ensign to minimize deck personnel and maintain maximum security levels during transit.
Insurance underwriters report a 20 percent surge in premiums for cargo coverage in the Red Sea region, reflecting concerns over missile, drone, and mine threats posed by Iran-backed Houthi militants.
Market impact: Frontline’s stock rose by approximately 7.5–8 percent on both Oslo and U.S. markets following the announcement, reflecting investor confidence in the company’s cautious strategy. Analyst insights suggest this move could reshape global shipping patterns. Container carriers may reroute around the Cape of Good Hope, avoid transits through Jebel Ali, and increase reliance on alternative oil supply lines.
By halting Hormuz-bound contracts, Frontline is signaling a significant shift in corporate risk management amid heightened geopolitical tension. With nearly 20 million barrels per day of oil transiting the Strait, any sustained rerouting or disruption could ripple through global energy markets, insurance sectors, and international supply chains.
