U.S. Crude Shipping Costs Soar to Record $44.8M Amid Middle East Turmoil

The cost of shipping U.S. crude oil to Asia has reached a record high of $44.8 million, according to Baltic Exchange data released on September 15. This is an all-time high and a significant increase from the previous day's price of $39 million. Before the Iran war broke out in late February, the cost was around $17.8 million.

The surge in shipping costs is due to supply disruptions and tanker risks, which have boosted demand for U.S. crude exports. The situation has become more critical after Saudi Arabia closed its East-West pipeline, making American supplies even more crucial.

Despite the record-breaking shipping costs, U.S. oil remains a viable option for buyers in Asia because West Texas Intermediate (WTI) is still cheaper than competing cargoes, such as Murban from the United Arab Emirates. As long as this price advantage persists, buyers are likely to absorb the higher-than-usual shipping costs.