Tanker Rates Nearly Double as Middle East Producers Boost Exports

Oil tanker rates have nearly doubled in the Middle East region as producers ramp up exports and demand for vessels increases. The Strait of Hormuz, a vital waterway through which oil tankers pass, has seen a modest increase in traffic since Iran lifted its blockade last week. However, this is still only a fraction of the daily average of 125 tankers that passed through before the conflict began on February 28.

According to shipping data and sources, rates for hiring a tanker outside the Strait of Hormuz have jumped to $190,500 per day from $106,500 just a week ago. Average daily earnings for Very Large Crude Carriers (VLCCs) have also surged to nearly $470,000 per day for cargoes inside the Gulf that need to pass through Hormuz.

Despite war risk insurance costs softening in the past five days, tanker operators are preparing for an influx of Middle East crude cargoes and are emboldened by spot TCEs averaging above $100,000/day. Middle Eastern producers, particularly Abu Dhabi National Oil Company, have offered crude in a flurry of tenders this month, spurring demand for tankers.