Shipping ETFs Surge as Strait of Hormuz Trade Collapses

A small group of U.S.-listed shipping exchange-traded funds has rallied sharply since the US-Iran war began on Feb. 28, 2026. Breakwave Tanker Shipping ETF (BWET) is about 3,200% higher year-to-date. Other funds have climbed between roughly 45% and 95%. Together the handful of U.S. shipping ETFs hold under $450 million in assets.

Two of the funds, BWET and Breakwave Dry Bulk (BDRY), gain exposure mainly through freight futures. Freight futures are contracts that lock in the price to move cargo on a specific route weeks ahead. When chartering a tanker or bulk carrier becomes more expensive, those futures rise in value and the funds that own them can move sharply. On Sept. 10 the Baltic Exchange’s Gulf-to-China supertanker rate reached a record $862,150 a day. BWET traded near $781.92 on Monday, versus a 52-week low around $13.58.

Other U.S.-listed funds take equity positions in shipping companies such as Frontline and Maersk. SonicShares Global Shipping (BOAT) and US Global Sea to Sky Cargo (SEA) reflect the stock moves of operating firms rather than daily swings in freight rates. Over the past year BOAT is up about 69%, SEA about 45% and BDRY about 95%.

The gains are linked to changes in Middle East maritime traffic. Before the conflict roughly 125 vessels passed the Strait of Hormuz each day; on Sept. 10 only seven crossed. Insurers raised premiums and some onshore alternatives to the strait were taken offline, including Saudi Arabia’s East-West pipeline. Talks in Oman about reopening alternative routes were postponed. These developments lengthened voyage routes, increased time at sea and raised fuel and shipping costs.

Higher freight costs have coincided with moves in energy markets. Brent crude has traded above $100 a barrel and moved past $110. Retail diesel prices reached record highs in parts of the United States, topping $6 a gallon in 28 states.

Market participants describe the sector as narrowly focused. Todd Sohn, chief ETF strategist at Baird Strategas, called it “hard to find something more niche than this.” John Kartsonas, founder of Breakwave Advisors, noted: “If there is a normalization in the Strait of Hormuz, you would expect freight rates to come down, and that would affect freight futures as well.”

Analysts point out that funds backed by freight futures can swing more sharply than equity-based funds because futures amplify short-term spikes in demand and rates. Shipping-company stocks move with firms’ debt levels and capacity changes and tend to reflect longer-term shifts in demand and balance sheets. With only a few U.S.-listed shipping ETFs and limited assets, the recent returns are concentrated in a small segment of the market.