The cost of shipping US crude oil to Asia has surged to unprecedented levels, dealing a blow to American exports in the region. The Iran war has disrupted global shipping routes, driving up the price to lease a tanker for the Pacific journey to nearly $80 million. This record-high rate is making US crude less competitive in Asian markets.
As a result, refinery orders for US crude set for November delivery have plummeted roughly 50% to between 24 million and 26 million barrels. Traders, who spoke anonymously due to lack of authorization to comment publicly, reported this sharp decline in orders this month. If this trend continues through the end of October, it would mark the lowest export volume in seven years, according to ship-tracking data from Kpler and Vortexa.
The spike in tanker rates is directly linked to the Iran war, which has altered shipping patterns and increased demand for tankers. This has created a bottleneck in the market, pushing lease prices to historic highs. The situation is expected to persist as long as the conflict continues to disrupt global trade routes.