US Crude Shipping Costs Soar to Record Amid Iran Conflict
The cost of shipping US crude oil to Asia has reached an all-time high due to the ongoing conflict in Iran. According to Baltic Exchange data, hiring a very large crude carrier to transport two million barrels from the US Gulf Coast to China now costs approximately $44.8 million, up sharply from $39 million just a day prior.
This surge is attributed to the escalating disruptions to supplies in the Middle East and the war-induced turmoil in the Strait of Hormuz. As a result, American oil has become even more critical in backing up supply gaps left by the conflict.
The situation has been exacerbated by Saudi Arabia's closure of the East-West pipeline, which had previously helped the country circumvent the Iran-related turmoil. Despite record shipping costs, buyers in Asia remain eager to secure energy shipments due to the relatively lower price of West Texas Intermediate compared to competing cargoes from other regions.