Oil tanker shortage drives up global shipping costs

A global shortage of available oil tankers is driving up freight costs and threatening to disrupt international oil flows. On the route from Houston to Asia, shipping costs have approximately tripled in recent weeks, adding about $26 per barrel, which equates to $52 million per cargo load.

Saad Rahim, chief economist at Trafigura, stated at the Bloomberg Commodity Investor Forum that it has “never been so expensive to transport oil.” The rising logistics costs are making some long-distance shipments unprofitable, prompting buyers to seek closer supply sources.

The shortage is attributed to geopolitical tensions, including the conflict between the US and Iran, which keeps vessels tied up near the Strait of Hormuz. Additionally, conflict in Yemen has forced many ships to avoid the Red Sea, opting for longer routes around Africa. This shift, combined with Asian buyers replacing Middle Eastern supplies with American oil, has further strained the availability of Very Large Crude Carriers (VLCC).

Amid this boom, South Korean billionaire Chung Ga-Hyun has significantly expanded his fleet through his company, Sinokor. Reports indicate Sinokor may own approximately 80 VLCCs, representing one in ten of the world's largest crude oil tankers.