Key facts
- Earnings on the benchmark Saudi Arabia-to-China supertanker route surged to a record $647,000 per day.
- This rate is more than ten times higher than a year ago.
- Persian Gulf producers are increasing crude shipments through the Strait of Hormuz.
- Exporters are competing for a smaller pool of tankers willing to transit the Strait of Hormuz.
- Houthi attacks in the Red Sea are forcing rerouting of some oil shipments.
Earnings on the benchmark Saudi Arabia-to-China supertanker route surged to a record $647,000 per day on Thursday, according to Baltic Exchange data cited by Bloomberg. This rate is more than ten times the rate a year ago and nearly 27% above the $510,000 reached just ten days earlier. The spike is attributed to Persian Gulf producers increasing crude shipments through the Strait of Hormuz despite the ongoing Iran war. This has led to competition for the smaller pool of vessels willing to transit the strait, creating an extraordinary premium for those taking the risk. Producers have begun shuttling crude through Hormuz before transferring cargoes onto other tankers outside the Gulf, effectively creating two freight bills. TotalEnergies CEO Patrick Pouyanne stated that moving a cargo through Hormuz costs about $20 million, with tanker market participants indicating these costs have risen further. Even outside the strait, rates are climbing, with a tanker traveling from Oman to China now commanding roughly $220,000 per day, up from $131,000 a month ago. The squeeze is amplified by Houthi attacks in the Red Sea, which have forced Saudi Arabia to redirect some barrels through the Mediterranean and around Africa, adding approximately 30 days to voyages bound for Asia. Traders estimate Hormuz outflows at 6 million to 8 million barrels per day, while Goldman Sachs puts flows at roughly two-thirds of pre-war levels.