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Supertanker Rates Double as War Disrupts Key Routes
5 Mar
Summary
- Supertanker rates to Asia from US Gulf Coast have doubled.
- A single supertanker booking for China cost over $29 million.
- Bookings are unraveling due to historically high shipping costs.
The cost of shipping crude oil from the US Gulf Coast to Asia has reached record highs, prompting some supertanker bookings to fall apart. Rates have doubled in the past two weeks, with a single charter to China now exceeding $29 million, equating to approximately $14.50 per barrel.
This dramatic increase stems from escalating Middle East conflict, which has disrupted vital shipping lanes like the Strait of Hormuz. As a result, Asian buyers are increasingly turning to US crude, while Atlantic Basin supplies also face higher premiums. This heightened demand and disrupted supply chain have driven up shipping expenses significantly.
Despite the booming market for available tankers, with daily rates comparable to sophisticated offshore rigs, the record-high costs are proving unsustainable for some. Several supertanker bookings made earlier in the week have already been canceled, indicating a potential cooling-off period as the industry grapples with the economic implications of geopolitical instability.
