Lates News

The cost of shipping U.S. crude to Asia has surged to a record high amid concerns over Middle East supply disruptions. Data from the Baltic Exchange showed that as of Tuesday, chartering a Very Large Crude Carrier (VLCC) to transport 2 million barrels of U.S. Gulf Coast crude to Asia cost about $44.8 million, setting a historic record and rising further from $39 million the previous day. Before the outbreak of the Iran war, the shipping cost on this route was about $17.8 million. As the Middle East situation disrupts energy supplies, U.S. crude has become an important source to fill the supply gap. Saudi Arabia previously shut down the East-West pipeline connecting its east and west coasts, intensifying market concerns about supply risks in the Strait of Hormuz. Despite the sharp rise in freight rates, Asian buyers remain willing to bear higher shipping costs because U.S. WTI crude is still more price-competitive than other competing crudes after arriving in Asia. Data from research firm Kpler showed that six VLCCs are already scheduled to load crude from the U.S. Gulf Coast in October and head to Asia.