Frontline Shares Surge On Canal Fears
Shares in Bermuda registered Frontline, one of the world’s largest oil shipping companies, have surged in recent days given mounting international fears the Suez Canal might be closed to supertanker traffic.
Frontline shares closed up more than eight percent on the New York Stock Exchange on Friday [Jan. 28] because of the wave of anti-regime protests which have swept Egypt in recent days.
On Thursday the volume in calls to buy Frontline’s shares was the highest since June, 2010.
The Suez Canal is a key transit point for oil and fuel shipments from the Persian Gulf to the West. Any closure would mean ships would have to travel around the southern tip of Africa, adding thousands of miles to their journeys, and likely tightening shipping capacity.
The Dow Jones news service reports while there are no credible indications the Suez Canal is in danger of shutting down, it’s seen as a possibility as protestors continue to rally on Egypt’s streets calling for the ouster of President Hosni Mubarak.
As of 2008, Hamilton-based Frontline’s fleet consists of 66 tankers, totaling 16.4 million dead weight tons. The company’s largest shareholder is Hemen Holding Ltd., a company indirectly controlled by the chairman of Frontline, billionaire John Fredriksen, Norway’s highest net worth person.
