Oil tanker rates soar to highest since 2023 on Middle East conflict

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SINGAPORE – Tanker rates extended gains as tensions in the Middle East ratchet higher, with ship owners demanding bigger fees to call at ports in the Persian Gulf after the US launched strikes on Iran over the weekend.

The benchmark rate for a supertanker carrying two million barrels of crude from the Middle East to China climbed 12 per cent, reaching the equivalent of about US$76,000 a day, the highest since March 2023, according to data from the Baltic Exchange in London.

Freight rates have now more than doubled – adding about US$1.40 a barrel to the cost of shipping oil – since Israel first fired missiles at Iran as ship owners demand bigger premiums to continue allowing their vessels to sail through the Strait of Hormuz and into the Persian Gulf.

Navies have cautioned about an elevated risk to shipping in the region, though for now flows appear largely unaffected. 

Forward-freight agreements – a derivative of shipping rates – for the key route for supertankers carrying crude from the Middle East to East Asia rose in the week’s opening session.

Such contracts for the rest of June were being bid at 100 industry standard Worldscale points on June 23, according to people involved in the market, though it was unclear at what level they last traded.

Worldscale points are a percentage of an underlying flat rate, which is set for each major route at the start of the year.

On June 23, the Joint Maritime Information Centre (JMIC), which liaises between navies and merchant ships, said it assesses an elevated threat risk for shipping. 

“This is attributed to significant regional conflict, uncertainty of Iranian state and non-state actors and mixed messaging,” it said in a daily update. “JMIC recommends the shipping industry remain vigilant to the changing security environment and have threat and risk mitigation plans at the ready.” BLOOMBERG