Korean shipping companies face limited direct exposure in the conflict-hit Strait of Hormuz, but mounting risks to long-term transport contracts could weigh on revenues, according to Korea Investors Service (KIS).
Out of a combined owned fleet of 453 vessels across six major firms—Pan Ocean, H-Line Shipping, SK Shipping, Korea Line Corporation, Polaris Shipping, and HMM—only eight vessels have been identified as currently operating within the strait.
KIS noted that this represents a relatively small share of each company’s fleet, with exposure levels at 1.7% for Pan Ocean, 1.8% for SK Shipping, and 4.1% for HMM, indicating that “physical exposure…is not significant.” Shipping lines are actively exploring alternative port arrangements and rerouting strategies to mitigate disruptions caused by the ongoing tensions.
However, the agency warned that the real impact will depend less on vessel location and more on contract structures. Under time charter agreements, shipowners can continue to earn charter hire as long as vessels remain operational and free of fault. In contrast, long-term transport contracts—where revenue depends on completing individual voyages—are more vulnerable to disruption.
Of the 51 vessels currently engaged in long-term bulk transport contracts for crude oil and LNG, 45 are operating on routes to the United States and Australia, while six remain anchored near the Indian Ocean, reflecting a shift away from Middle East loadings.
Companies with a higher reliance on long-term contracts linked to Middle Eastern cargoes face greater volatility. SK Shipping leads with 50% exposure to such contracts, followed by Korea Line Corporation (19%), H-Line Shipping (4%), and Pan Ocean (3%). Key clients include major energy players such as SK Energy, GS Caltex, SK Gas, and Korea Gas Corporation.
Longer alternative routes—such as shipments from the U.S. or West Africa—are also increasing voyage durations from around 25 days (Middle East–Korea) to as much as 35–60 days, delaying freight payment cycles and adding pressure on cash flows.
Meanwhile, risks have escalated following reported damage to LNG infrastructure at Ras Laffan Industrial City, operated by QatarEnergy. The disruption has raised the possibility of force majeure declarations on LNG supply contracts, potentially affecting global importers including South Korea.
KIS highlighted that Pan Ocean, H-Line Shipping, and SK Shipping collectively operate 15 LNG carriers on long-term charter to QatarEnergy, underscoring potential knock-on effects if supply disruptions persist.
While immediate fleet exposure remains contained, analysts caution that prolonged instability in the region could significantly impact voyage execution, contract performance, and revenue visibility for Korean shipping firms.
