The BWET ETF provides exposure to the performance of crude oil tanker freight rates rather than the price of oil itself. It does this by investing in futures linked to the Baltic Dirty Tanker Index, allowing investors to benefit when demand for tanker capacity and shipping rates rise.
The ETF has been the standout non-leveraged ETF of 2026; the BWET has surged almost +700% year to date courtesy of the geopolitical shock from the effective closure of the Strait of Hormuz through tanker freight rates rather than oil prices themselves. While earlier this month WTI crude had retraced most of its gains to trade around US$70, tanker rates remained elevated as shipping disruptions persisted. It is an obscure niche ETF that few retail investors have heard of, yet it has become one of the defining macro trades of 2026.
Our focus today was on whether this ETF can provide any leading indicators for crude. The BWET ETF was only launched in 2018; hence, there is limited price history to draw on, and the correlation we hoped to uncover didn’t arise, as the relationship runs in the opposite direction. Rather than BWET leading crude, it is crude oil that leads BWET, which makes sense, i.e. tanker shipping demand and freight rates are largely a downstream consequence of oil price moves and physical crude trade flows.
- The concurrent correlation of +0.46 confirms the two move broadly together, but BWET’s own predictive power over crude (+0.13) is negligible.
We would get a technical sell signal if the BWET broke back under US$220, but as we touched on earlier, crude is likely to have already fallen by 10-20% at this stage.
- We see no reason to chase the BWET ETF above US$250, but its elevated levels are a concern for inflation.
