Oil Shipping Rates Soar Amid Sanctions and Strong Demand

Global tanker rates continue to climb as U.S. sanctions on Russia tighten and demand for Middle Eastern oil to Asia rises. Significant increases have been noted in very large crude carrier (VLCC) rates, impacting both crude and clean product tanker costs.

Oil shipping rates have surged, driven by expectations of a tighter global tanker supply due to enhanced U.S. sanctions on Russia's fleet and heightened demand for vessels to load Middle Eastern oil destined for Asia, industry insiders revealed on Wednesday.

These developments have seen Shell and Shenghong Petrochemical booking Very Large Crude Carriers (VLCCs) to transport up to 2 million barrels from the Middle East at rising Worldscale rates, reflecting increased trader activity for February loading.

Supertanker freight rates have escalated across various routes, with the Middle East to China path experiencing a notable increase, impacting refining margins in Asia and prompting strategies to manage higher logistical costs.

(With inputs from agencies.)