Supertankers avoid Gulf transfer hub as freight costs surge

Empty supertankers are turning away from the Persian Gulf as escalating attacks disrupt ship-to-ship transfer operations and push freight costs to unprecedented levels. The shift affects a critical hub for wartime oil shipments and is forcing Asian refiners to reconsider their crude sourcing strategies.

Freight rates reach $82 million per voyage#

Supertanker freight costs from the U.S. Gulf Coast to Asia have reached $82 million per voyage on some routes, according to market reports cited by Bloomberg and CNBC. The U.S. Gulf Coast to Japan route saw one vessel offered at $82 million in early October, up 50 per cent from three weeks earlier. Trafigura chartered a supertanker from the U.S. Gulf Coast to China at a lump-sum fee of $76 million, ten times the $7 million to $10 million charged before the conflict began in February. The freight cost now adds approximately $38 per barrel to U.S. crude delivered to Asia, effectively closing the arbitrage that had made American oil competitive in the region during earlier months of the war.

Asian refiners shift to Middle East and South American crude#

Asian refiners are turning to Middle East and South American crude as U.S. barrels become uneconomic at current freight rates, shipbrokers and traders told Reuters. Demand for the UAE's Murban grade increased, pushing its premium over Dubai quotes above $11 per barrel on October 10. U.S. crude had served as an alternative supply source for Asian buyers during much of the Iran conflict, but the economics no longer support long-haul shipments from the U.S. Gulf Coast. The shift reflects the tanker market's continued strain from vessel shortages, as many ships remain tied up in inefficient trades designed to work around constraints at the Strait of Hormuz.

Gulf oil flows recover to 81 per cent of pre-war levels#

Crude oil, condensate and refined fuel flows from the Gulf region excluding Iran averaged 19.2 million barrels per day in September, according to Vortexa data cited by Jordan News. The figure represents 81 per cent of the 23.6 million barrels per day averaged in the year before the conflict began on February 28. Kpler data showed total oil exports at 18.6 million barrels per day in September. Saudi Arabia led the recovery with crude and condensate exports rising to 6.6 million barrels per day in September from 4.2 million barrels per day in August, according to Kpler. The increase offset declines from other Gulf suppliers and lifted the region's net export growth despite infrastructure attacks that temporarily shut the Kingdom's East-West pipeline and halted crude shipments at the Yanbu terminal on the Red Sea.

Iranian exports fall to zero under U.S. blockade#

Iranian oil exports dropped to zero in September under the U.S. maritime blockade reinstated in mid-July, according to preliminary tanker-tracking estimates compiled by Bloomberg. At least 50 Iranian tankers laden with crude, refined products and liquefied petroleum gas remained stranded near Iran's coastline as of early October, United Against Nuclear Iran reported. The non-profit identified 16 laden tankers near Kharg Island, Iran's key export terminal. Iran's offshore crude stockpile in Southeast Asia is being rapidly depleted, with an estimated 9 million barrels transferred through ship-to-ship operations off Malaysia in September, drawing down inventories accumulated before the blockade took effect, UANI said. The group estimates roughly 10 million barrels of Iranian crude now remain in floating storage around Malaysia's Eastern Outside Port Limits.