Supertanker rates approach $1M a day amid dual-strait crisis

The cost of moving crude oil from the Middle East to Asia has reached levels without precedent. Chartering rates for very large crude carriers on the benchmark Arabian Gulf-to-China route have surged past $800,000 per day and, in mid-September assessments, approached or exceeded $1 million per day on some quotes, according to Baltic Exchange data and industry sources.energynewsbeat+1

The spike caps a months-long escalation in freight costs driven by the near-total closure of the Strait of Hormuz to commercial shipping and, more recently, the loss of Saudi Arabia's main workaround export route.

A Dual-Chokepoint Crisis

Bloomberg reported on September 10 that VLCC earnings on the Middle East-to-China route had reached a record of nearly $800,000 per day, while U.S. Gulf-to-Asia lump-sum voyage costs hit $29.5 million — equivalent to roughly $15 per barrel before war-risk charges. Rates have continued climbing since.oilprice+1

The immediate catalyst was a series of drone strikes launched from Iraqi territory on September 10–11 that hit pumping stations along Saudi Arabia's East-West pipeline, known as the Petroline. Saudi Arabia shut the 750-mile system, which had been carrying 4–5 million barrels per day of export crude to Red Sea terminals at Yanbu, as a precautionary measure. Reuters reported that repairs could take five to six weeks. The pipeline had served as Riyadh's primary alternative to the Strait of Hormuz, which has been effectively closed to most commercial traffic for nearly 200 days.cnbc+2

Compounding the pipeline outage, Houthi forces seized the Yemeni port city of Mocha and Perim Island, tightening their grip over the Bab el-Mandeb Strait and targeting Saudi-linked vessels. Ship traffic through the strait halved in the days following the seizure.energynewsbeat+1

Asian Refiners Squeezed

The record freight costs are reshaping the economics of crude procurement across Asia. Dr. Amrita Sen of Energy Aspects described an "upward spiral between crude and products," noting that Asian refiners are cutting run rates because of crude availability constraints rather than weak demand. India's tanker costs have more than doubled in about two weeks, with daily charter hire rates rising from roughly $100,000 to $250,000, according to the Indian National Shipowners' Association.urbanacres+1

China has resumed heavier crude buying — roughly 10 million barrels per day for September, according to Energy Aspects, up from under 7 million barrels per day during a June slump — yet inventories have drawn 120 million barrels in two weeks. Global strategic petroleum reserves in the United States and Japan sit at record lows.energynewsbeat

No Relief in Sight

Analysts at Kpler and other firms expect VLCC earnings to remain elevated well into 2027. The freight surge adds $10–15 per barrel or more on some routes before war-risk extras, feeding inflation in gasoline, diesel, and consumer goods. U.S. diesel prices have exceeded $6 per gallon, with President Trump on September 13 calling on Ukraine to halt strikes on Russian refining, saying the attacks are "hurting the world". Capital Economics said this week's developments could push crude toward $120 per barrel.benzinga+1