Fears over Israel’s conflict with Iran and its proxies in the Middle East have sent tanker rates skywards.
The Baltic Exchange’s suezmax time charter equivalent assessment shot up nearly 21% to $29,329 per day on Wednesday, while the aframax reading went even higher: 49.6% to $34,379 per day.
Clarksons analyst Frode Morkedal said: “Rising tensions in the Middle East, combined with higher oil prices, may boost shipping activity.
“Speculation about tighter sanctions on Iran, whose oil is largely transported by the shadow fleet, could potentially drive up demand for regular tankers.”
The rising rates followed a massive missile barrage fired at Israel from Iran in retaliation for Israel killing Hezbollah leader Hassan Nasrallah last week.
Israel has also launched raids in southern Lebanon and bombed Beirut while continuing its attacks in the Gaza Strip in an effort it says is to wipe out Hamas.
The intensifying conflict has some observers concerned that Iran could close the Strait of Hormuz, the 57 km-wide chokepoint through which up to 35% of the world’s oil passes through.
But even if Iran does not act, there are reportedly calls within Israel to attack Iran’s nuclear and oil facilities.
Rystad Energy said Iran produces roughly 4m barrels of crude oil per day, with 2m headed to China.
“In the event of a war directly involving Iran, the risk of reduction to its crude exports would become real,” said the energy research outfit’s chief economist, Claudio Galimberti.
He said Opec and its allies — already set to raise production this year — could easily fill the gap.
“However, if the Strait of Hormuz were to be impacted, then all bets would be off,” Galimberti said. “Any blockage to the strait would result in runaway prices, increasingly quickly and steadily the longer the blockage persists.”
Earnings for VLCCs were not as dramatic as the smaller crude asset classes.
The Baltic Exchange TCE assessment showed a much smaller 5.6% jump from $35,119 per day to $37,087 per day on Wednesday.
VLCC fixtures out of the Middle East Gulf were slightly higher.
Tankers International shows Trafigura taking two vessels, the 297,250-dwt New Vista (built 2011) and 300,000-dwt Alterego (built 2022), on charter for voyages to China in late October.
The China VLCC Co-controlled New Vista is set to earn $40,246 per day, while Heidmar’s Alterego was fixed at $38,542 per day.
