The shipping costs for oil and natural gas have reached unprecedented levels amid escalating tensions in the Middle East, with Iran warning of a potential closure of the strategic Strait of Hormuz.
Recent conflicts between the United States and Iran, including attacks on vessels and the killing of Iran’s Supreme Leader Ayatollah Khamenei, have severely disrupted maritime traffic in the region.
Iran has threatened to close the Strait of Hormuz, vowing to attack any ships attempting to pass, raising fears of a wider supply crisis.
As a result, global energy markets are feeling the impact. Oil prices in Europe have surged sharply, with Brent crude jumping 10% this week. Meanwhile, shipping costs for oil and LNG have soared to record highs.
According to data from the London Stock Exchange Group, companies are now paying approximately $423,736 daily to ship a large tanker from the Middle East to China.
Shipping rates for LNG have also seen dramatic increases. On Monday, the cost to rent LNG carriers surged over 40%, partly due to Qatar halting production amid the crisis. Atlantic Ocean shipping rates hit $61,500 per day up $18,750 from the previous week, while Pacific routes climbed to $41,000 per day, an increase of $12,750.
Energy analysts warn that the situation could worsen. Fraser Carson, principal analyst for global LNG at Wood Mackenzie, predicts prices could reach as high as $100,000 per day this week.
He also highlighted that vessel availability remains weak, with intense competition for the limited number of ships still operational.
Despite Iran’s threats and the recent military escalation, the US military has confirmed that the Strait of Hormuz has not yet been closed.
However, the ongoing tensions continue to cast a shadow over global energy markets, with supply concerns mounting amid geopolitical uncertainties.
