The cost to charter a tanker from the United States to China rose to $80 million this week, exceeding the $74 million price of a standard SpaceX Falcon 9 rocket launch.
Freight rates hit historic highs
Freight rates on the US-China route jumped to $41 per barrel this week, compared with an average of $4.50 per barrel last year. This rate represented about 45 percent of the West Texas Intermediate (WTI) futures price, which stood near $91 per barrel around Friday.
SSY data show that, even when adjusted for inflation, current freight costs are at their highest since the early 1960s and have surpassed levels seen during the tanker wars of the 1980s between Iran and Iraq in the Gulf of Basra. Gibson provided the figures.
Supply constraints drive rising costs
Russell Hardy, executive committee chairman at Vitol Group, said, “In the market there are not enough ships to actually absorb the demand; we are facing a very parabolic pricing.” The shortage is exacerbated by reduced access to the Strait of Hormuz, which has recovered to 80 percent of pre-war shipment levels but remains limited.
Additional delays average about one week per transshipment trip. Attacks linked to Iran have removed vessels from active service for repairs, further tightening supply.
Impact on energy markets and logistics
Rising tanker costs are increasing expenses for crude oil buyers, squeezing refinery margins and adding inflationary pressure to energy markets. Iran’s exports to China have effectively stopped, raising demand for tankers supplying the Chinese market.
Resuming shipments through the Gulf requires repositioning ships, which can take weeks. Lauren Gallinari, business intelligence chairman at MJLF & Associates, noted the unusual scale and speed of freight market changes, underscoring the strain on global oil transport networks.
Source: SSY
