Oil tanker rates top $1 million a day as Iran war disrupts Hormuz shipping

Oil tanker rates on the industry’s benchmark route topped $1 million a day for the first time as the Iran war continues to disrupt shipping through the Strait of Hormuz.

Tankers carrying crude from inside the Persian Gulf to China were being hired at about $1.035 million per day on Monday, according to Baltic Exchange data.

The benchmark route has become less representative of normal Gulf exports during the war as many tanker operators avoid entering the Strait of Hormuz. Instead, more crude is being moved through the strait on shuttle vessels and transferred for collection outside the chokepoint.

Even routes that avoid Hormuz have become significantly more expensive. Shipping crude from the Gulf of Oman to China now costs the equivalent of roughly $644,000 per day.

The surge reflects a tightening supply of available tankers as disruptions force ships onto longer and more complicated routes.

Additional vessels are being used to shuttle crude through Hormuz, increasing journey times and reducing overall tanker availability.

Shipping disruptions linked to Houthi attacks have also forced some vessels to sail around Africa, adding roughly 30 days to certain voyages.

At the same time, elevated refining margins are encouraging refiners to keep buying crude despite soaring transportation costs, as shortages of refined products continue to support profits from turning oil into diesel and gasoline.