Record Tanker Rates Cripple U.S. Crude Oil Flows to Asia
The Iran war has made oil tanker voyages so inefficient that vessel availability has crumbled and freight costs have soared to record-highs, all but erasing the incentive for shipping crude oil from the U.S. Gulf Coast to Asia. The cost of shipping crude oil from the U.S. Gulf Coast to China soared to as high as $80 million earlier this month. That’s ten times the average tanker rates that had…
The Iran war has caused a surge in tanker rates that is crippling crude oil flows from the U.S. Gulf Coast to Asia, according to recent reports. Freight costs have reached unprecedented highs, with a single voyage costing as much as $80 million, ten times the typical rates seen before the conflict. Asian refiners are ordering significantly less U.S. crude for delivery in November, with purchases dropping by about 50% from September levels to around 25 million barrels.
This is the lowest volume of U.S. crude in Asia since seven years ago, according to vessel-tracking analysts. The crisis is affecting global oil markets, with U.S. crude prices dropping as refiners seek to find barrels closer to home and sellers discount barrels to account for the high shipping costs.
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