Oil Shipping Rates Hit Record High Amid Escalating Middle East Tensions

The cost of shipping oil in the largest tankers has reached record highs due to a surge in attacks on shipping since the US-Iran conflict began in late February.

The shipping rate for supertankers, or very large crude carriers (VLCCs), loading oil from the Gulf of Oman for shipment to China hit 450 on a Worldscale basis, equivalent to approximately $11.50 per barrel, according to Baltic Exchange data.

This is the highest rate since the start of the conflict, with analysts attributing the spike in rates to the increased risk of operating in and around the Middle East Gulf due to fear of Iranian retaliation.

Vortexa analyst Ioannis Papadimitriou noted that 'renewed attacks between the U.S. Navy and Iran continue to push freight rates around the Gulf to new highs,' adding that the higher risk is driving Gulf of Oman freight rates higher in fear of Iranian retaliation, which naturally thins out the available tankers in the region.

The recent military escalation in the region has also had a wider knock-on effect, with VLCC rates on the West Africa to Asia route reaching record highs as well.