Key facts
- Daily tanker charter rates exceeded $1 million for the first time due to supply constraints and geopolitical risks.
- Tankers carrying crude from the Persian Gulf commanded rates as high as $1.035 million per day.
- Attacks on vessels in the Strait of Hormuz have contributed to a decline of 65 million barrels in oil on water.
- Global oil inventories have seen a significant drawdown, losing 507 million barrels since February.
- Cyberattack investigations are underway for at least two tankers traveling from Europe to the U.S.
- Prices for second-hand oil tankers have surged, with used vessels commanding higher prices than new builds.
Daily rates for chartering oil tankers have surged past $1 million for the first time in history, driven by a tightening supply of vessels willing to navigate the Strait of Hormuz amid escalating geopolitical tensions and cybersecurity concerns. The increased costs are adding to the price of oil for physical delivery.
According to data from the Baltic Exchange, tankers commissioned to pick up crude from within the Persian Gulf fetched as much as $1.035 million per day. Rates for tankers operating outside the Strait, such as those carrying crude from the Gulf of Oman to China, also saw substantial increases, reaching $644,000 daily.
Disruptions are not limited to the Strait of Hormuz. Costs are also rising from Russia's Black Sea port of Novorossiysk due to the risk of Ukrainian drone attacks. For the seventh consecutive week, key tanker rates for shipping crude oil from Novorossiysk have climbed.
These higher freight rates contribute to increased end prices for crude oil, exacerbating supply concerns. Global oil inventories have seen a significant drawdown, with a cumulative loss of 507 million barrels since February. Oil on water has also decreased by 65 million barrels due to attacks in the Strait of Hormuz. Saudi Arabia's East-West pipeline remains out of service following a drone attack, further impacting supply.
Adding to the market's complexity, U.S. federal authorities are investigating potential cyberattacks targeting tankers. Reports indicate at least two vessels traveling from Europe to the U.S. were targeted around Gibraltar, raising suspicions of state-sponsored activity. Officials warn that cyberattacks on tankers carrying volatile crude oil could lead to fires, explosions, or oil spills.
In response to soaring tanker rates and skyrocketing insurance costs, energy market participants are increasingly looking to purchase their own vessels. The demand for second-hand oil tankers has driven their prices above those of new builds, as new ship construction can take two to three years. Used very large crude carriers are now selling for approximately $182 million, compared to $130 million for new builds.