The oil crisis has moved downstream. Goldman Sachs says the average global freight rate for moving crude has reached about 20 dollars a barrel, nearly seven times the 3 dollars seen a year ago, as the Iran war and the Strait of Hormuz crisis tie up tankers in long, inefficient voyages. On Middle East routes, Goldman puts freight at about 35 dollars a barrel, and supertanker rates on the Gulf to East Asia run topped 1.4 million dollars a day in early October, a record.
The bank’s commodity analysts break the increase into three pieces: an extra 7 dollars a barrel of war risk premium in Hormuz, 4 dollars from higher fuel costs, and 4 dollars for ship to ship transfers in the Gulf of Oman, which park tankers on shuttle duty and shrink the available VLCC fleet for other routes. That squeeze has spilled into the smaller vessel market, with Aframax and Suezmax rates and demand surging as shippers substitute away from unavailable supertankers. The analysts warn that higher freight for longer is an upside risk to Goldman’s baseline Brent forecast of 90 dollars a barrel at year end, alongside the risks of more intense shipping attacks, infrastructure damage and a stickier geopolitical risk premium.
The International Energy Agency’s numbers, published in its October 14 Oil Market Report, put the refinery impact in dollars. The agency said the freight rate for a VLCC on the Middle East Gulf to Asia route had risen to around 36 dollars a barrel by early October, more than five times the cost before the Iran war, while US Gulf Coast to China exceeded 37 dollars a barrel. The higher delivered costs pushed margins for Asian refiners processing medium sour crude into negative territory in September, the IEA said, and warned that further deterioration could prompt economic run cuts at marginal Asian and European refineries, a move that would tighten diesel and product markets further.
The market’s two views of Hormuz now sit in tension. Data covered elsewhere in this edition show crude flows through the strait recovering through shuttle transfers, yet the freight cost of making those flows happen is rising faster than the volume. That is why freight, not the wellhead, is setting the price signal: every recovery in barrels now arrives with a transport surcharge, and Goldman’s warning is that the surcharge is becoming structural enough to lift the forecast band for crude itself.