Tanker Rates Hit Record $1.4 Million Per Day Amid Iran War

The cost of shipping crude oil surged to record highs in September and October as the ongoing Iran war reshuffled global trade patterns, tying up tankers in lengthy and inefficient voyages. According to data compiled by Bloomberg and reported by OilPrice, supertanker rates on the Persian Gulf to China route exceeded $1 million per day in September before climbing another 40% in the first week of October to top $1.4 million per day.

Strait of Hormuz Bottlenecks

The increased flows of oil from the Strait of Hormuz, largely driven by ship-to-ship transfers in the Gulf of Oman, are forcing supertankers to wait for weeks outside the strait. This bottleneck limits the availability of very large crude carriers for other key global routes, such as the U.S. Gulf Coast to Asia. Vitol Chief Executive Officer Russell Hardy noted at the Energy Intelligence Forum in London that the situation has evolved from a crude and product crisis into a full-scale shipping crisis.

Shipbroker Fearnleys reported that regional crude exports from the Middle East actually exceeded pre-war levels on several days in late September. However, shuttle-shipping through the Strait of Hormuz remains inefficient, and the supertanker crunch has triggered a ripple effect across smaller vessels, driving up daily rates for Aframaxes and Suezmaxes alike.

Exploding Cargo Costs

Individual cargo shipping costs have escalated dramatically across major trade routes. Rates on the U.S. Gulf-to-Japan route skyrocketed, with one supertanker offered at a total fee of $82 million. Commodity trading giant Trafigura chartered a supertanker to move crude from the U.S. Gulf Coast to China at a total fee of $76 million, roughly ten times pre-war levels of $7 million to $10 million, adding approximately $38 per barrel in freight costs alone.

Argus experts warned that freight premiums are adding tens of dollars per barrel to delivered crude costs, raising questions about demand sustainability. Meanwhile, shipbroker Fearnleys stated that with smaller vessel classes showing no sign of slowing down, there is currently no relief in sight for maritime shipping markets.

Key facts

• Supertanker rates on the Persian Gulf to China route topped $1.4 million per day in October.
• U.S. to China crude shipping fees reached $76 million per cargo, approximately ten times pre-war levels.
• Ship-to-ship transfers near the Strait of Hormuz are tying up supertankers for weeks.
• Daily freight rates for smaller Suezmax and Aframax vessels have surged amid a global vessel shortage.