Oil tanker rates have surged to a record $1.2 million a day on key routes in West Asia as the US war on Iran continues to disrupt shipping and trigger a severe shortage of some of the world’s largest crude carriers, according to a report.
The cost of hiring a Very Large Crude Carrier (VLCC), capable of carrying around 2 million barrels of oil, has more than doubled on routes from West Asia to China since late August, according to shipbroker Braemar, the Financial Times reported.
The sharp increase comes as tankers are rerouting and traveling significantly longer distances amid disruptions to maritime traffic in the region.
Rates for transporting crude from Brazil to China have also risen by about a third over the past week, according to Braemar.
“Freight rates have gone parabolic,” Amrita Sen, founder of consultancy Energy Aspects, said, warning that surging shipping costs could become a major pressure point for global energy markets as the cost of delivered crude in Asia approaches $150 a barrel.
VLCC rates had mostly ranged between $20,000 and $50,000 a day over the past year. Even before the war on Iran began, a structural tanker shortage had pushed rates for Persian Gulf cargoes to a record $120,000 a day in February, according to the Baltic Exchange.
The latest surge comes amid Iran’s restrictions on transit through the Strait of Hormuz following the aggression against the Islamic Republic that began on February 28.
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