Freight rates for oil supertankers are rising amid increasing risk of a serious U.S. strike against Iran and may exceed the highs recorded in 2020, Bloomberg reports.
According to the Baltic Exchange, the freight rate for VLCC-class tankers on the Middle East to China route has nearly tripled since the beginning of this year, reaching $151,208 per day, the highest level since the onset of the COVID-19 pandemic in 2020.
The United States has significantly increased its military presence in the Middle East recently. American President Donald Trump stated on February 19 that Tehran has 10-15 days to reach an agreement with Washington on its nuclear program and that "very bad things" will happen if an agreement is not reached.
A serious strike against Iran could disrupt shipping in the Strait of Hormuz, a key route for Middle Eastern oil supplies, and further increase freight costs.
The rise in rates is also supported by the concentration of ownership of such vessels, Bloomberg notes. According to the agency, in the last one to two months, the South Korean company Sinokor has acquired or chartered a significant number of supertankers and now controls about 120 VLCCs. "Military actions in the Middle East are likely to drive freight rates to levels not seen since 2019," notes Oil Brokerage analyst Anup Singh.
Freight rates on other routes are also rising: rates for VLCCs heading from the U.S. portion of the Gulf of Mexico to China are at their highest since late 2022, according to Baltic Exchange data.
