Oil tanker freight rates suddenly surged to outrageous levels. The day’s earnings on the benchmark VLCC route from the Middle East to China have nearly reached $800,000, hitting an all-time high—more than doubled within two months. Single-voyage charter rates from the U.S. Gulf to Asia have also risen to about $29.5 million, and that’s not even accounting for war risk and delay costs. The main reason is that fewer ships are willing to transit the Strait of Hormuz, further tightening available capacity.
My sense is that, in the short term, this spike in high freight rates is unlikely to cool off quickly, because the longer detours will increase voyage length and the truly usable vessels will remain in short supply.
My sense is that, in the short term, this spike in high freight rates is unlikely to cool off quickly, because the longer detours will increase voyage length and the truly usable vessels will remain in short supply.
