Oil tanker earnings near $650,000 per day as Middle East disruption deepens

Oil tanker earnings have skyrocketed to nearly $650,000 per day as disruptions in the Middle East deepen, according to Clarksons Research. The cost of transporting crude through key shipping routes has surged to record levels due to the US-Israeli war on Iran and subsequent restrictions on vessel traffic. Very Large Crude Carriers (VLCCs) have seen a 40 percent increase in average spot earnings to almost $642,000 per day globally.

This surge is particularly extreme on some routes, such as Oman to South Korea and the US Gulf to China, where earnings have reached $845,000 a day and $50 million per voyage, respectively. The disruption has forced tankers to take longer routes and engage in complex ship-to-ship transfers, tying up a growing share of the world's tanker fleet.

With at least nine million barrels per day of crude passing through the Strait of Hormuz, only about six million barrels per day less than pre-conflict levels, the shipping industry is adapting through "shuttling" methods. However, this process is creating its own bottlenecks, further reducing the availability of tankers and driving rates higher.

Saudi Arabia has relied on its East-West pipeline to shift crude oil exports away from the Gulf, which has come under attack and is expected to return to about 50 percent capacity by November. Despite the disruption, energy markets have remained relatively resilient, with Brent crude falling below $100 a barrel as flows from the Arabian Gulf increase.

However, the impact on shipping vessels has been dire, with unprecedented tanker capacity scarcity as they spend longer times completing journeys.