Vessels hauling oil from inside the Persian Gulf to China were being hired at $1.035 million a day, according to data from the Baltic Exchange in London on Monday, marking the first time the industry’s benchmark trade route has crossed the seven-figure threshold. The spike reflects a severe shortage of vessels willing to cross the Strait of Hormuz to collect cargoes as the Iran war continues to disrupt regional shipping. The benchmark route itself has become less representative of actual trade flows during the conflict, since the main method of exporting Persian Gulf oil has shifted to shuttling barrels through Hormuz for pickup by tankers stationed just outside the strait that avoid navigating it directly. Even that alternative routing is not cheap: transporting crude to China from the Gulf of Oman, which bypasses the chokepoint entirely, now costs the equivalent of about $644,000 a day.
The extraordinary earnings partly reflect oil-refining margins that have spiraled out of control, as wars in both Iran and Ukraine mean the world is no longer producing enough finished fuel to meet demand, pushing refiners to keep buying and shipping whatever crude they can secure. At the same time, the growing fleet of vessels shuttling cargoes out of Hormuz is adding time to each tanker’s voyage, tying up vessel supply industry-wide. Compounding the squeeze, disruptions to Saudi oil flows from Yemen’s Houthi rebels have forced some ships onto a diversion around Africa that adds roughly 30 days to the voyage, further tightening available tonnage just as global fuel demand remains elevated.
Source: gCaptain / Bloomberg — https://gcaptain.com/oil-tanker-rates-top-1-million-a-day-as-hormuz-war-squeezes-fleet/
Tags: Strait of Hormuz, Tanker Rates, Iran War, Oil Shipping
