Tanker freight rates have surged to records, adding a growing share to the price of oil. Attacks on ships tied to the US-Iran and Russia-Ukraine wars have lifted freight and insurance costs, and import-reliant countries feel it most.
A supertanker voyage from the United States to Japan this November will cost $81 million, against $9.1 million on average last year. The Esteem Explorer will carry about 2 million barrels of crude, so the bill works out to $40.50 per barrel, about nine times last year's rate.
Transport costs now add to the burden of high crude prices. Kenneth Medlock of the Baker Institute for Public Policy says every $10-per-barrel rise in shipping costs adds about 23 cents per gallon to gasoline. By Reuters calculations, the Esteem Explorer's voyage adds at least 80 cents per gallon versus last year.
Freight takes over 40% of the US oil price
Freight rates account for more than 40% of the price of US oil, based on Wednesday's price around $95 per barrel. That compares with 7% on average in 2025, according to LSEG data.
Medlock expects the effect to spread through the economy. According to Medlock: "Everything gets more expensive because that’s how we move stuff around." Countries that rely on imports, including India, the Philippines and Indonesia, bear the brunt. Rising costs are stoking inflation in such countries.
War risk and scarce ships push rates higher
Attacks on ships tied to the US-Iran and Russia-Ukraine wars have boosted freight and insurance rates. Rates to move oil from the Strait of Hormuz and the Red Sea to Asia hit a record high around $34 per barrel this week as shippers price in a risk premium. Ships also sail longer routes, which ties up tankers for longer.
The shortage of very large crude carriers has lifted prices for smaller vessels. Since the Iran war began in February, freight rates have quadrupled for Suezmax ships on the US Gulf Coast to Asia route and for Aframaxes on the US Gulf Coast to Europe route, according to Signal Ocean.
Tanker owners are collecting the gains. Signal Ocean analyst Georgios Sakellariou said they have earned as much as $1.3 million per ship per day on a round trip from the Persian Gulf to Asia, against $55,000 on average in 2025.
Poten & Partners' Erik Broekhuizen expects tanker rates to stay strong as long as crude demand exceeds supply, but to come off quickly once the market loosens.
Source: Reuters via Investing.com
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