$1.1 Million-a-Day Oil Tankers Fuel Shipping Crisis

The shipping industry is facing a crisis as tensions escalate between the US and Iran in the Strait of Hormuz. The cost of hiring Very Large Crude Carriers (VLCCs) has skyrocketed, with daily rates rising 12-fold to a record high of $1.1 million per day for tankers traveling from the Persian Gulf to Asia.

This increase is due in part to concerns about safety and security in the region. Former President Bill Clinton once noted that when a crisis breaks out, Washington's first question often is, 'Where is the nearest aircraft carrier?' For the shipping industry, it may be, 'Where are the nearest oil tankers, and do we have enough?'

The price of shipping VLCCs has become a benchmark for the industry. With rates at an all-time high, the question remains whether there will be enough capacity to meet demand.