Shipping oil through Hormuz costs US$20 million, Total CEO says
The additional freight costs for a supertanker equate to about US$10 a barrel
In a bid to highlight the lucrative opportunities in the oil trade, TotalEnergies CEO Patrick Pouyanne revealed that shipping oil through the Strait of Hormuz costs around US$20 million. This revelation comes amid a period when producers are eager to offload their supplies following a six-month conflict. TotalEnergies, one of the largest traders of oil from Iraq and Qatar, currently purchases barrels priced between US$50 to US$60 per barrel, according to Pouyanne.
The additional freight costs for a supertanker to navigate through the Strait of Hormuz amount to approximately US$10 per barrel, Pouyanne emphasized. With benchmark Brent futures trading above US$90 on Monday, the French energy giant's involvement in this sector is significant. The Strait of Hormuz, which once carried about a fifth of the world's oil flows, has been a critical waterway for producers during recent weeks, aiding in preventing prices from surging beyond US$100 a barrel.
While some oil cargoes sail directly to refineries worldwide, many are first loaded onto ships in the Gulf of Oman before reaching their final destinations. This split in the crude oil markets, driven by flows through Hormuz, contrasts with tight fuel markets. Prices for products like gasoline and diesel have risen due to Ukrainian attacks on Russian refineries and the reliance of these markets on oil shipped through the Strait of Hormuz.
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