Intercontinental Exchange Inc. (ICE) announced two new forward-freight agreements (FFAs) for tanker voyages outside the Strait of Hormuz, responding to disruptions from the Iran war and Red Sea tensions. The contracts cover Gulf of Oman-to-China (TD34) and West Africa-to-China (TD15) routes, offering cash-settled futures based on Baltic Exchange assessments for very-large crude carrier voyages. ICE also introduced two cash-settled container freight average price options for Asia-to-Northern Europe and Asia-to-US West Coast routes.
Jeff Barbuto, SVP and global head of oil markets at ICE, stated the new FFAs provide "direct, transparent ways to hedge Gulf of Oman-loading and West Africa-loading voyages for the first time." The developments reflect industry shifts as shipowners avoid the Strait of Hormuz due to heightened risks, rerouting to alternative paths to maintain oil supply chains. These instruments aim to address pricing volatility in global energy and freight markets amid ongoing geopolitical instability.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing