The global oil market is facing a shortage of available supertankers, driving maritime transportation costs to record levels. Freight has become so expensive that some long-distance routes are already losing their economic viability.
On the main route from the Persian Gulf to China, earnings for Very Large Crude Carriers capable of transporting around 2 million barrels of oil have exceeded $1.2 million per day.
The increase is particularly noticeable on long-haul routes. Shipping crude oil from Houston to Asia now adds approximately $26 to the cost of every barrel. For a standard cargo of 2 million barrels, this represents an additional expense of around $52 million per voyage.
Transportation previously accounted for a relatively small share of the final cost of oil. Freight has now become one of the key factors determining whether international shipments remain commercially viable.
According to data analytics company Vortexa, oil shipments from the United States to Asia have declined in recent weeks, while freight costs have nearly tripled.
High tanker rates are forcing buyers to seek sources of crude located closer to their refineries. The structure of oil transportation is also changing, with some Asian refiners increasingly using Aframax and Suezmax tankers capable of carrying smaller cargoes.
In some cases, a shipment that would normally be transported by one VLCC is now being carried by two Suezmax tankers, each with a capacity of approximately 1 million barrels.
The shortage of available tonnage has also affected other parts of the tanker market. Suezmax rates have already exceeded $300,000 per day, generating record earnings for shipowners.
One of the main reasons behind the increase in shipping costs is the impact of the conflict between the United States and Iran and disruptions to maritime traffic around the Strait of Hormuz. Changes to traditional routes, longer voyages and additional oil transfer operations have increased demand for available tanker tonnage.
Some vessels are being forced to follow longer routes around Africa. These voyages require more time and fuel, while keeping tankers out of the available fleet for extended periods.
Additional demand is being created by the need to transport oil from Persian Gulf ports through the Strait of Hormuz before transferring it to larger tankers in the Gulf of Oman.
For shipowners, the current situation means record profits. For the oil market, however, it has the opposite effect: the higher the freight cost becomes, the fewer long-distance shipments remain economically attractive.
As a result, the geography of global oil trade is beginning to change not only because of the availability and price of crude, but also because of the cost of the vessel required to transport it.
