Supertanker Shortage Sends Oil Shipping Costs Soaring
The global oil market is facing unprecedented disruptions due to a shortage of supertankers, which are essential for transporting crude oil across long distances. The soaring cost of shipping oil has made some long-haul trades uneconomical, threatening to disrupt flows at a time when fuel markets have never been tighter.
According to Saad Rahim, chief economist at trading giant Trafigura Group, 'it has never been this expensive to move oil around.' The jump in freight costs is being driven by a shortage of available supertankers. In some parts of the world, there are barely any of these massive ships left for hire.
The squeeze is making faraway barrels less attractive and encouraging refiners to snap up supplies closer to home if they can find them. Moving a cargo from Houston to Asia now adds about $26 a barrel, $52 million a cargo, to the cost of supplying the world’s largest crude-importing region, which is roughly a quarter of the price of West Texas Intermediate futures.
The shortage has rippled down to smaller ships, with Asian refiners turning to 700,000-barrel Aframax tankers for some purchases from the US. Shipments loading from ports in the Atlantic, including Brazil, are being booked on two 1 million-barrel Suezmax vessels rather than one supertanker with twice that capacity.