Shipping costs for crude oil have surged by 258% over the last two months, reaching approximately $24 per barrel for routes from the Middle East to Asia. This increase is driven by the ongoing US-Iran conflict, which has significantly impacted energy logistics since late February 2026.
Daily charter rates for Very Large Crude Carriers (VLCC) have exceeded $1 million for the first time, with reports reaching $1.035 million. A single voyage from the US Gulf Coast to China recently cost a record $44.8 million, or roughly $22.40 per barrel.
The rise in costs is attributed to higher war-risk insurance premiums, a reduced number of available tankers, and the rerouting of shipments. The closure of Saudi Arabia’s East-West pipeline and record-high auction fees for the Panama Canal, reaching $5.3 million, have further strained the market.
Major importers in Asia, including China, India, Japan, and South Korea, are facing significant margin compression as freight costs now account for up to 25% of the delivered price. Buyers are increasingly seeking alternative supply sources in West Africa and the Americas to avoid the Persian Gulf.
