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Strait of Hormuz conflict drives VLCC shipping costs above $1.2 million daily
Disruptions in the Strait of Hormuz due to conflict in the Middle East have caused a surge in global shipping costs and energy market volatility. Daily rental rates for Very Large Crude Carriers (VLCC) on routes between the Middle East and Asia have exceeded $1.2 million, with prices for the main route to China doubling since late August.
As a result of these disruptions, Asian refineries are increasingly seeking crude oil from the Atlantic Ocean and the North Sea, extending voyage durations to between 30 and 40 days. Shipping costs now account for 20% to 40% of the final delivered price of crude oil. Consequently, crude oil costs delivered to Asia are approaching $150 per barrel.
The energy crisis is also driving a shift toward biofuels as nations seek to diversify supplies and enhance energy security. The World Economic Forum notes that the closure of the Strait of Hormuz has accelerated this trend. However, experts warn that increased biofuel demand could create competition for food crops.
In Europe, the energy situation is further strained by a projected jet fuel supply deficit of 510,000 barrels per day. To mitigate this, European nations are relying more on imports from South Korea, which exported approximately 129,000 barrels of jet fuel per day to Europe in September.
Entities
ADNOC · Aramco · Argus · Baltic Exchange · China · Dow Jones Industrial Average · Energy Aspects · Federal Reserve · Financial Times · Middle East · Nasdaq · Reserve Bank of Australia
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 8 SOURCES] The Federal Reserve implemented a 25-basis-point interest rate hike. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id · www.europesays.com · +2 more
- [● 5 SOURCES] The Nasdaq Composite rose by 0.39%. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id
- [● 5 SOURCES] The Dow Jones Industrial Average declined by approximately 0.18%. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id
- [● 2 SOURCES] Investors are anticipating a rate increase from the Reserve Bank of Australia.
- [● 5 SOURCES] The S&P 500 index recorded a gain of 0.17%. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id
- [● 6 SOURCES] Australian S&P/ASX 200 futures indicated a potential decline of 0.7%. www.europesays.com · www.watoday.com.au · www.theage.com.au · www.smh.com.au
- [DISPUTED] Brent crude oil prices settled above US$103 per barrel. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id · www.watoday.com.au · +2 more
- [● 10 SOURCES] The yield on the 10-year US Treasury note rose above 5%. businessnews.com.my · transactiondalgerie.com · www.perthnow.com.au · katadata.co.id · www.europesays.com · +4 more
- [○ 1 SOURCE] Morgan Stanley forecasts average Brent crude at $100 per barrel for the fourth quarter of 2026. www.latestly.com
- [○ 1 SOURCE] The cost of moving two million barrels from West Africa to China in a VLCC reached $23.59 per barrel on September 18, compared to $6.50 in July. diariosocialista.net
- [○ 1 SOURCE] Oil prices could reach $140 per barrel due to escalating Middle East conflicts. www.santosvasquezinforma.com
- [○ 1 SOURCE] In Colombia, current oil prices near $103 create a significant gap between local gasoline prices and international references. www.elnuevosiglo.com.co