Oil tanker fares in the Persian Gulf have become up to 60% more expensive

According to Energy Press and quoted by Reuters, following the increase in tensions between Iran and Israel, the freight rate for transporting oil by giant tankers from the Persian Gulf to Asia has increased, while the trend of booking ships has also decreased. Shipping industry sources told Reuters that the market is waiting for further developments and concerns about the possibility of disruption to maritime traffic have increased.
The global rate for transporting oil by VLCC (very large crude carrier) tankers from the Persian Gulf to Japan (TD3 index) increased by more than 20 percent on Friday. This increase occurred after the escalation of tensions between Tehran and Tel Aviv. Data from the financial platform LSEG also confirmed this trend.
However, on Monday, the freight rate on the Persian Gulf to Japan route remained almost stable at the level of W55 according to the international Worldscale index.
Market in a state of anticipation
Anup Singh, global head of shipping research at Oil Brokerage, said: “Ship booking activity was almost at a standstill on Friday and the physical market cannot provide an accurate indicator. However, ships are still in the Persian Gulf looking to load for outbound routes.
He added: “The situation remains fluid and more information is likely to be released as the market fully reopens.”
Sentosa brokers also said: “There has been a slight increase in freight rates, but we expect this trend to continue and intensify throughout the week.”
Concerns about the Strait of Hormuz and insurance costs
Amril Jamil, senior crude oil analyst at LSEG, stressed: “Freight rates will depend heavily on the extent of the escalation of tensions and the possibility of Iran closing the Strait of Hormuz. About 18-19 million barrels of oil and petroleum products pass through the strait daily.
He added: “Currently, the war risk premium in the market is high and if other oil and gas infrastructure in the region is attacked, this risk will increase sharply. Cargo insurance may increase by between $3 and $8 per barrel.”
Increase in oil product shipping rates
Before the conflict began, the rate for shipping about 90,000 tons of gasoline, diesel or jet fuel from the Middle East to the west of the Suez Canal was estimated at between $3.3 million and $3.5 million. But market sources say new offers have reached levels of $4.5 million.