Oil tankers sailing US-China route are commanding US$60 million and it is crushing demand
The tanker rate along the US Gulf Coast-to-China route has more than tripled since the US-Iran conflict erupted in late February.
American crude oil exports to Asia have plummeted to multi-year lows following the Iran war, which has disrupted global shipping and driven the cost of leasing a tanker for the Pacific route to nearly US$80 million. Asian refinery orders for US crude in October fell by about 50% to 24 million to 26 million barrels compared to the previous month, indicating a seven-year low.
The tanker rate along the US Gulf Coast to China route has more than tripled since the US-Iran conflict began in late February, reaching almost US$60 million as of October 22. This unprecedented rate is equivalent to half the cost of building a new vessel and does not include the price of the oil itself, which is trading around US$100 a barrel.
The high freight costs are squeezing the economics of long-haul routes, making it more expensive for Asian buyers to source crude from the US Gulf Coast.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
