The tanker trade is feeling the pressure as tensions rise in the Middle East. Shipping rates jumped over 20% on Friday after Iran and Israel exchanged attacks. According to industry sources, the cost to charter a very large crude carrier (VLCC) from the Gulf to Japan — a key route — jumped from about W55 to nearly W66 in a matter of hours.
So, what does this mean for you, me, and everyone else?
Higher tanker trade rates affect nearly everything we buy. Oil companies pay more to move their crude across the world, and those prices eventually trickle down to the cost of petrol, diesel, and many products made from oil. It’s kind of like when your delivery pizza charges you a “fuel surcharge” — someone has to pay for it. Guess who that is?
Middle East Tensions Push Shipping Higher
The crisis started when Iran and Israel exchanged attacks last weekend. Shipping companies immediately raised their prices — nearly overnight — reflecting a “conflict premium” due to the risk of disruptions. The Strait of Hormuz, a key route for nearly 18–19 million barrels of oil a day, is now a nervous spot for the industry.
Some shipowners are holding back their vessels. They’re waiting to see if Iran might close the Strait of Hormuz or attack nearby facilities. That would send shockwaves through the tanker trade — and through your wallet.
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Rising Costs, Rising Uncertainty
Emril Jamil from LSEG Oil Research says the war-risk premium is staying high for now. Cargo insurers are adding $3 to $8 a barrel if attacks continue. Clean products — like diesel and jet fuel — are seeing prices rise from about $3.3–$3.5 million per journey to nearly $4.5 million.
Meanwhile, brokers like Sentosa say many shipowners are choosing to stay put. They want more clarity before sending their ships into a danger zone. That’s adding pressure to the market and making prices more unpredictable.
Why It Matters (For All of Us)
Higher tanker trade costs can affect prices at the pump and even for products made from oil. It’s a ripple effect — chaos in the Middle East means higher prices for businesses, consumers, and drivers all over the world.
Picture it like a busy highway suddenly closing a few lanes. Everyone has to squeeze through the small gap, causing a huge bottleneck.
The tanker trade is a key link in the world’s oil supply chain. Right now, it’s feeling the pressure from conflict. If tensions ease, prices may stabilize. But if attacks continue or the Strait of Hormuz is closed, we could see much higher freight and oil prices soon.
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