Global Oil and Gas Shipping Costs Surge

Middle East Tensions Push Tanker Rates to Record Highs

SINGAPORE – Shipping costs for oil and gas have skyrocketed globally, with supertankers in the Middle East reaching record daily rates, following Iran’s threats to close the Strait of Hormuz in retaliation for US and Israeli military actions.

The Strait of Hormuz, the critical waterway between Iran and Oman that carries roughly one-fifth of the world’s oil supply and substantial volumes of liquefied natural gas (LNG), has seen shipping operations come to a near standstill after several vessels were targeted in recent attacks.

Market reactions have been immediate: Brent crude prices surged nearly 10 percent this week amid concerns over prolonged disruptions, while LNG shipping rates in both the Atlantic and Pacific regions jumped more than 40 percent.

Supertanker rates, measured by the TD3 index for vessels transporting 2 million barrels of oil from the Middle East to China, reached an all-time high of W419 on the Worldscale system, equivalent to $423,736 per day. The figure doubled in just a few days after the US and Israel carried out strikes that killed Iran’s Supreme Leader Ayatollah Khamenei.

LNG shipping has also been affected, with Atlantic rates climbing to $61,500 per day, a 43 percent increase, and Pacific rates rising 45 percent to $41,000 per day, according to Spark Commodities. Energy consultancy Wood Mackenzie warns that spot LNG rates could exceed $100,000 daily this week due to tight supply and limited vessel availability.

Authorities in Iran stated that the Strait of Hormuz is closed and vowed to target any ship attempting to pass, though the US Central Command disputed the claim, stating that the waterway remains open.

Shipping companies are responding cautiously. Several shipowners have suspended operations in the Gulf, and South Korean shipping firm Hyundai Glovis is exploring alternative routes and ports. The South Korean maritime ministry has advised vessels to avoid the Middle East for safety reasons and is evaluating further protective measures.

Industry experts warn that until safe navigation through the Strait of Hormuz is guaranteed, shipping schedules may remain disrupted, causing continued volatility in oil and gas transport costs worldwide.