The gamble to buy a series of super oil tankers before the Iranian conflict broke out has helped Sinokor group of Korean businessman Chung Ga-Hyun earn huge profits when ship rental prices skyrocketed unprecedentedly.
For months before the conflict broke out, Sinokor Group secretly purchased and leased a large number of super-large oil tankers (VLCC).
According to Bloomberg, Sinokor currently leases ships with a total price of up to 500,000 USD/day for use as floating oil storage - nearly 10 times higher than last year.
Bold gamble before conflict
Before the war broke out, Sinokor had deployed at least 6 hollow oil tankers into the Persian Gulf. These ships anchored waiting for goods while the market had not yet recognized the scale of the strategy that Chung Ga-Hyun was implementing.
When war broke out and the oil flow was interrupted, energy companies were forced to find temporary storage for the oil that could not be transported. Sinokor's empty ships quickly became extremely valuable assets.
According to market data, the transportation price of oil from the Middle East to China by Sinokor's VLCC ship at times reached about 20 USD/barrel, while the average last year was only about 2.5 USD.
Mysterious figure in the oil transport industry
In the maritime transport industry, which is famous for bold figures, Chung Ga-Hyun is still considered a rather special person.
Sinokor was established in 1989, initially operating in the field of container transport and opening the first Korean-Chinese container transport route. The group's chairman is Chung Tae-Soon Chung, father of Chung Ga-Hyun and a well-known figure in the Korean maritime industry.
In contrast to his father, Chung Ga-Hyun maintains a discreet image. Even many people in the shipping industry describe him as an unpredictable figure and rarely appearing in front of the media.
According to industry sources, Chung Ga-Hyun directly made important decisions and negotiated major contracts himself. He often established exchange groups on messaging applications to manage work and even called rival ship owners to discuss the market.
Controlling nearly 40% of the fleet, huge profits
Sinokor's gamble really attracted the maritime transport industry's attention when this company continuously bought or rented more VLCC ships in a short time.
Some competitors estimate that by the end of February, Sinokor could control about 150 super oil tankers, equivalent to nearly 40% of the ships that have not been sanctioned or have no long-term contracts in the market.
This move has caused the cost of chartering ships globally to increase sharply. The rental price of a VLCC ship under a 1-year contract has exceeded $100,000/day, a record high in tracking data since 1988.
Currently, many Sinokor ships are operating as floating oil storage in the Persian Gulf because the Hormuz Strait is still restricted from circulation.
If the price of half a million USD/day is maintained, some ships that Sinokor bought for about 88 million USD can recover capital in less than 6 months.
However, analysts believe that Chung Ga-Hyun's gamble still contains risks. The Iran war could cause unprecedented disruptions to oil supplies, and in the long run this could reduce oil shipments at sea.
However, in the short term, Sinokor's bold strategy is bringing huge profits.
