Business Standard ·
Economy, business and finance
Iran war pushes cost of shipping US Gulf Coast oil to Asia to record
US oil continues to backstop the supply gaps left by the war
The cost of shipping US crude to Asia has surged to a fresh record as buyers are desperate to secure energy shipments amid escalating disruptions to supplies in the West Asia.
As of Tuesday, it cost about about $44.8 million to hire a very large crude carrier, or VLCC, to take 2 million barrels of crude from the US Gulf Coast to China, according to Baltic Exchange data. That’s an all-time high and up sharply from $39 million just a day prior. Before the break out of the war in Iran in late February, the cost was about $17.8 million.
US oil continues to backstop the supply gaps left by the war. This week, Saudi Arabia closed the East-West pipeline, the primary link that helped the country circumvent the Iran war-induced turmoil in the Strait of Hormuz. The situation has made American supplies even more critical, with record shipping costs doing little to deter buyers in Asia as the conflict reshapes global energy flows.
