Hormuz closure lifts BWLP profits; newbuilds and bond raise growth risk
Hormuz closure reshapes LPG trade, lifting rates and profit The Strait of Hormuz closure cut Middle East LPG exports 46%, but US exports rose 16% and India-bound shipments jumped 212%. Longer routes tie up ships, pushing BWLP's Q2 profit to $120 million and Q3 guidance to $88,000/day, over three times its $24,900 breakeven.
This is the core force behind BWLP's earnings surge and record stock price.
Shipping stocks hit multi-year highs as freight markets tighten A basket of 35 shipping stocks is up about 68% this year, with gas carriers among the leaders. BWLP is at a record high. Investors see shipping as a hedge against geopolitical instability, and longer voyages increase demand for vessels, supporting BWLP's share price.
Shows the broad market backdrop that is lifting BWLP's valuation.
Asset sales and convertible bond strengthen capital position BWLP sold the BW Levant for $38 million cash and a $17 million book gain, and later sold older vessels including BW Elm and BW Birch. It also raised $300 million in convertible bonds at a low 2.25% coupon to help fund eight new Panamax VLGCs.
These moves show disciplined capital allocation and fund growth without straining the balance sheet.
Risks: Hormuz reopening, huge orderbook, and trading losses CEO Sorensen warned a reopened Strait could pressure spot rates, and Middle East export recovery may take 12–36 months. The global VLGC orderbook is now 155 ships, about 35% of the fleet, which could add supply. The trading arm posted a $31 million net loss after a $145 million unrealized swing.
These are the real counterweights that could cap BWLP's gains.