Key facts
- Supertanker rates hit a record $1.4 million per day on the Persian Gulf to East Asia route in early October.
- Ship-to-ship transfers outside the Strait of Hormuz are tying up supertankers for weeks, limiting availability.
- Rates for Aframax and Suezmax vessels have also surged due to the supertanker shortage.
- A supertanker was reportedly offered at $82 million for a U.S. Gulf-to-Japan route, a 50% increase from three weeks prior.
- Commodity trader Trafigura reportedly chartered a supertanker for $76 million to ship crude from the U.S. Gulf Coast to China.
The cost of shipping crude oil has surged to record highs, with supertanker rates exceeding $1.4 million per day in early October, a significant jump from September's record of over $1 million per day on the Persian Gulf to China route. This escalation is attributed to the Iran war, which has reshuffled global trade patterns and led to lengthy, inefficient voyages, particularly due to ship-to-ship (STS) transfers outside the Strait of Hormuz. These transfers are tying up very large crude carriers (VLCCs) for weeks, limiting their availability for other key trade routes, such as from the U.S. Gulf Coast to Asia. The ripple effect has also impacted smaller vessels like Aframax and Suezmax, whose demand and daily rates have also surged amid the supertanker shortage. Commodity trading giant Vitol's CEO, Russell Hardy, described the situation as evolving from a crude crisis to a product crisis, and now a full-blown shipping crisis, noting a general scarcity of shipping capacity. Rates on the U.S. Gulf-to-Japan route have also skyrocketed, with one supertanker reportedly offered at $82 million for the journey, a 50% increase from three weeks prior. Trafigura reportedly chartered a supertanker for $76 million to ship crude from the U.S. Gulf Coast to China, a fee ten times higher than pre-war times, suggesting freight costs now add about $38 per barrel. Shipbroker Fearnleys noted that regional crude exports from the Middle East have exceeded pre-war levels on some days in late September, luring tankers to the lucrative Middle East trade and exacerbating vessel shortages elsewhere. Argus experts highlighted that climbing shipping costs are straining oil trading economics, with freight premiums adding tens of dollars per barrel to delivered crude costs and raising questions about demand destruction.