Record Tanker Rates Cripple U.S. Crude Oil Flows to Asia
Dips Into Strategic Oil Reserve Again Amid Supply Disruptions What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… 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.
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 held for years before the Iran war.
Freight rates have eased from the record highs seen in early October, but they were still about $60 million for a supertanker to carry oil from the U.S.
The cost is so high that Asian refiners aren’t ordering much crude from the U.S.
So far this month, Asian refiner orders for U.S.
crude have plunged by about 50% from September, to about 25 million barrels that would be delivered in November, anonymous traders familiar with the purchasing toldBloomberg.
If orders remain so low for the rest of this monthly trading cycle, Asia could receive in November its lowest volumes of U.S.
crude oil in seven years, according to vessel-tracking analysts.Related: The Hidden $40-Per-Barrel Cost Driving Oil Prices Higher U.S.
crude oil and petroleum exports surged toa record highin the early weeks of the Middle East war.
But the conflict and attempts by Middle Eastern producers to move oil out of the Strait of Hormuz broke the global tanker market and added a shipping crisis on top of the oil supply and fuel crises.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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