The cost of hiring a very large crude carrier to ship 2 million barrels from the Middle East to China exceeded $200,000 a day on Thursday for the first time since 2020, LSEG data showed.
The benchmark freight rate, also known as TD3, rose to W218.52, or $206,141 per day, on the Worldscale industry measure used to calculate freight rates, the highest since April 2020.
It has nearly quadrupled from the start of the year, the data showed.
The surge in oil shipping costs follows increased crude exports from the Middle East as traders have accelerated charters ahead of possible tensions between the US and Iran. The rise is likely to reduce Asian refiners’ profits.
South Korean shipping group Sinokor’s VLCC buying spree has also supported freight rates, industry sources have said.
Adding to spot demand, Saudi Arabia’s biggest oil shipper Bahri has provisionally chartered three VLCCs – Nissos Anafi, DHT Jaguar and Maran Dione – to load crude on March 11-13 at W190-191 levels, said a shipbroker who declined to be named due to company policy.
Bahri did not immediately respond to a request for comment.