Key facts
- Goldman Sachs warns of a potential oil price shock due to soaring tanker rates.
- Average global oil freight rates have risen to $20 per barrel from $3 last year.
- Rates on Middle East routes have reached $35 per barrel.
- The surge includes a $7 war-risk premium in the Strait of Hormuz.
- Elevated rates pose an upside risk to Goldman's $90 per barrel Brent crude forecast for year-end.
The average global freight rate to transport oil has surged to $20 per barrel from $3 per barrel last year, according to Goldman Sachs. The investment bank attributes this surge to the ongoing Iran war and the crisis in the Strait of Hormuz, which have created a shipping bottleneck. Analysts at Goldman Sachs noted in a report that these elevated freight costs pose an upside risk to their current baseline forecast of $90 per barrel for Brent crude by the end of the year. Rates on Middle East routes have reportedly climbed to $35 a barrel. The increased costs include a $7 per barrel war-risk premium in the Strait of Hormuz, $4 per barrel for higher fuel costs, and another $4 per barrel for ship-to-ship transfers in the Gulf of Oman. These factors have reduced the availability of tankers for other trade routes. In early October, supertanker rates for the Gulf to East Asia trip reached a record high of over $1.4 million per day. The resulting shortage of supertankers has also driven up demand and daily rates for smaller vessels like Aframax and Suezmax.