Shipping ETFs Surge Amid Iran‑U.S. Conflict in the Strait of Hormuz

Four U.S. listed shipping exchange‑traded funds (ETFs) have generated extraordinary returns in 2026 after the Iran‑U.S. conflict sharply reduced vessel traffic through the Strait of Hormuz.

Market backdrop

On September 10, only seven ships crossed the Strait of Hormuz, compared with roughly 125 ships per day before the war began on February 28, 2026. The conflict has driven insurance costs up and forced Saudi Arabia to shut its East‑West pipeline, further constraining oil transport.

ETF performance

• Breakwave Tanker Shipping ETF (BWET) is up more than 3,200% year‑to‑date, trading around $782 after a 52‑week low of $13.58.
• Breakwave Dry Bulk ETF (BDRY) has risen about 95% over the past year.
• SonicShares Global Shipping ETF (BOAT) is up 69%.
• US Global Sea to Sky Cargo ETF (SEA) is up 45%.

How the funds profit

BWET and BDRY hold freight‑future contracts that lock in shipping rates for specific routes weeks in advance. When freight rates spike, the value of these contracts rises accordingly. On September 10, the Gulf‑to‑China supertanker rate reached a record $862,150 per day on the Baltic Exchange.

BOAT and SEA own shares of shipping companies such as Frontline and Maersk, capturing broader industry gains rather than the immediate rate spikes.

Outlook tied to conflict

Fund managers note that any normalization of traffic through the Strait of Hormuz would likely reduce freight rates and pressure the ETFs’ performance. John Kartsonas, founder of Breakwave Advisors, warned that a return to peace could diminish the funds’ returns.