Record Shipping Costs Force Oil Producers to Slash Prices
- Rates for very large crude carriers have surged to record highs, with ships earning as much as $1.3 million per day, compared to $55,000 per day on average in 2025, according to Signal Ocean freight analyst Georgios Sakellariou.
- Attacks on vessels related to the US-Iran and Russia-Ukraine wars have forced shippers to price in risk premiums, reducing ship availability and increasing the time cargoes spend on the water.
- The oil supertanker Esteem Explorer will cost $81 million for a late November trip, compared to $9.1 million last year; this expense adds at least 80 cents per gallon to gasoline prices, according to Reuters calculations.
- Rising transportation costs are stoking inflation in import-reliant countries, with grocery retailers facing higher freight bills; Kenneth Medlock, fellow in energy and resource economics at the Houston-based Baker Institute for Public Policy, noted these costs create a "sustained impact at the grocery store."
- Tanker rates will likely remain strong as long as crude oil demand exceeds supply, though Erik Broekhuizen, head of tanker research and consulting at ship broker Poten & Partners, noted rates will "come off the boil quickly" once the market loosens.
29 Articles
29 Articles
Despite rising petroleum product prices, the profitability of refineries in Asia and Europe has actually worsened. This is because the cost of importing crude oil has exceeded the increase in product prices, as tanker freight rates have surged more than tenfold due to ongoing armed conflict in the Middle East. According to the London Stock Exchange Group (LSEG) on the 20th (local time), the Rotterdam refining margin, a profitability indicator fo…
Asian refiners' pain is Middle East oil producers' problem: Bousso
LONDON: Shipping costs near record highs are crushing Asian refining margins even as global fuel markets run short of supply. To keep Asian refiners buying, Middle Eastern exporters may have to absorb more of those costs themselves, squeezing the revenue they desperately need after months of war.
Why Are Middle East Oil Producers Struggling Despite Recovering Exports?
Asian refiners are facing a growing squeeze as soaring shipping and insurance costs erode profits, threatening to undermine the recovery in Middle Eastern oil exports. Despite a rebound in crude shipments, Gulf producers may have to offer deeper discounts to keep Asian buyers interested, cutting into revenues already weakened by months of conflict. The disruption […]
Record Shipping Costs Force Oil Producers to Slash Prices
Freight is reshaping global oil trade and the prices producers can command for their crude. Soaring shipping costs are pushing delivered prices beyond what refiners are willing to pay, forcing sellers to cut differentials or find buyers closer to home. With Chinese refiners inclined to wait for transport costs to ease, some producers are committing barrels for future loading at prices that leave little room for today’s freight bill. Their return…
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