Tanker rates surge 20-fold as Hormuz traffic hits one-week low

The cost of hiring a supertanker to carry crude oil from the Persian Gulf to Asia has surged to nearly $500,000 per day, up from roughly $25,000 to $30,000 at the start of the year, as the ongoing conflict between the United States and Iran continues to deter vessels from transiting the Strait of Hormuz.

Tanker Rates Hit Historic Levels

South Korea's Sinokor Group, one of the world's largest owners of very large crude carriers, recently chartered one of its vessels for a Persian Gulf-to-Asia voyage at a rate of approximately $500,000 per day. At that price, a 30-day voyage from the Gulf to China costs about $15 million in charter fees alone — equivalent to roughly 7.5 percent of a full cargo's value.wanaen

The rate spike reflects a dramatic collapse in Hormuz traffic. On Tuesday, just eight vessels were tracked in the strait, falling below a 10-day average of about 12 and marking the lowest daily count since August 5, according to Kpler data reported by Reuters. Before Iran closed the waterway following US-Israeli strikes beginning February 28, some 130 to 140 ships typically transited per day.al-monitor

Oil Flows Partially Restored Through Alternatives

US Energy Secretary Chris Wright said on Tuesday that the seven-day average for oil leaving the Strait of Hormuz had reached nearly 9 million barrels per day, while total regional flows including pipeline and export facility volumes now average approximately 15 million barrels daily. Wright credited coordinated efforts between the US military and Gulf allies, noting that more than 20 million barrels left the Arabian Gulf region on Sunday alone.turkiyetoday

Saudi Arabia has demonstrated the most success in bypassing Hormuz, redirecting crude through its East-West Pipeline to the Red Sea port of Yanbu. Saudi cargo from its Gulf coast fell from 47.5 million tons to 6.3 million tons during April and May compared with a year earlier, while Red Sea exports rose from 29.6 million to 54.8 million tons, according to IMF PortWatch data.dw

Chokepoint Risks Multiply

The UAE has fared worse. Its alternative ports on the Gulf of Oman, including Fujairah, came under attack during the fighting and remain close enough to Iran to face drone and missile threats. Traffic through those ports declined rather than increased, falling from 13.7 million tons to 6.3 million tons over the same period.dw

Meanwhile, the Bab al-Mandab Strait at the southern end of the Red Sea saw 30 vessel crossings on Tuesday, above its 10-day average of 25, but the route faces its own threats after Yemen's Houthi forces declared a maritime blockade on Saudi shipping. Qatar, Kuwait, and Bahrain lack coastlines outside the Persian Gulf entirely, leaving them dependent on Hormuz in the short term.al-monitor+1

Tehran-based analyst Rahman Ghahremanpour warned that "if Iran keeps Hormuz closed for too long, the assumption that the disruption is temporary could disappear and a much broader international coalition could form against Tehran".dw