As war between the United States and Iran threw the Strait of Hormuz, a vital corridor for global energy shipments, into severe disarray, one figure in Korea's shipping industry has emerged as the biggest beneficiary of the crisis. That figure is Jung Ka-hyun, vice chairman of Jangkum Maritime, known in English as Sinokor. Analysts say he reaped the full benefits of a "war windfall" after building the world's largest tanker fleet just before the US and Israeli strikes on Iran.
The Wall Street Journal (WSJ) spotlighted Jung, the eldest son of Sinokor Chairman Jung Tae-soon, in an article on July 2 titled "Korean Tanker Tycoon Makes a Killing on Iran War." The WSJ described Jung as "one of the biggest beneficiaries of the Middle East conflict."
According to the report, Jung invested about $7 billion to build the world's largest tanker fleet before the US and Israel struck Iran. Jangkum Maritime is currently estimated to hold about 10% of the world's very large crude carriers (VLCCs). Although the exact size of the fleet has not been disclosed, Greek ship broker Xclusiv Shipbrokers estimated that Jangkum Maritime has secured more than 160 tankers, about half of which are VLCCs.
A significant portion of the investment funds appears to have come from Gianluigi Aponte, co-founder of MSC, the world's largest container shipping line. Aponte is regarded as having accumulated enormous cash during the COVID-19 pandemic amid a surge in container shipping rates.
The industry had initially viewed Jung's investment moves with skepticism. The prevailing expectation was that the highly volatile tanker market would ultimately teach a harsh lesson to a shipping "newcomer" like him.
But the outcome was the opposite. After the war, the Strait of Hormuz was blockaded and the shipping market plunged into severe chaos. As supplies of Persian Gulf crude were cut off, Asian countries moved to secure crude oil from Europe and the United States, and demand for tankers to carry the oil surged, sending freight rates to record highs. In fact, according to shipping research firm Clarksons, the average daily rate for VLCCs surpassed $385,000 in March, the highest since related statistics began in 2000.
Before the war, Jung preemptively positioned VLCCs inside the Strait of Hormuz and used them as offshore storage facilities in the early stages of the conflict. Some ships then served as shuttles, moving crude oil between the Strait of Hormuz and ports outside the Persian Gulf, where traders reportedly took delivery of the oil and transported it to Asia. The WSJ called it "one of the most notable bets in shipping history."
The episode has also drawn attention to Jung himself, who has kept a low profile. The WSJ noted that "he is known to shun media exposure and maintain a thoroughly low profile," adding that "he made headlines when he was spotted smoking a cigar at a late-night party surrounded by bodyguards at a shipping conference in Athens, Greece." It further added that "people who have dealt with him say he is skilled at judo and has created a large WhatsApp group chat with other shipowners to discuss market conditions."
Jangkum Maritime was established in 1989 as a joint venture with a Chinese partner during a thaw in relations between Korea and China. The company grew alongside expanding trade between the two countries, began adding tankers to its fleet after the COVID-19 pandemic, and accelerated ship purchases starting last year. The industry views Jung as pursuing a strategy of building a super-sized fleet with vast funds to secure market dominance.
The WSJ noted, however, that such a strategy does not always succeed. It pointed to the case of Nobu Su, a Taiwanese shipping magnate who amassed enormous wealth by dominating the bulk carrier market during China's economic boom in the 2000s, but failed when he attempted the same strategy in the tanker market amid the 2008 global financial crisis.
