War in the Middle East has doubled tanker freight rates in the region

Amid the war in the Middle East and a shortage of ships, tanker charter rates on this route have more than doubled.

Bloomberg reports.

According to shipbrokers, the rate for a Suezmax tanker, which can hold up to 1 million barrels of oil, on the route from the Middle East to China is set at 525 points by the industry standard Worldscale. As of Friday, February 27, this rate was 225 points, and at the beginning of the year – 50 points.

The industry uses the so-called Worldscale rates to conveniently calculate vessel revenues and the cost of freight per barrel on trade routes.

“The expansion of the war in the Middle East and the virtual closure of the Strait of Hormuz are accelerating the growth of tanker costs, which have previously also increased due to the threat of conflict,” analysts note.

In particular, price fluctuations are being exacerbated by the concentration of ownership of supertankers after South Korean carrier Sinokor Merchant Marine has been actively buying up large oil tankers in recent months.

As previously reported by USM, more than 200 ships have anchored near the Strait of Hormuz. At least three tankers have been damaged off the coast of the Persian Gulf since hostilities broke out between the United States, Israel and Iran.

Tags: freight rates