Oil Shipping Costs Soar, Adding to Global Prices

Freight rates for moving oil have surged, adding to fuel and consumer prices worldwide, according to a Reuters analysis. The supertanker Esteem Explorer, which will carry about 2 million barrels of US crude to Japan in late November, will cost $81 million for the voyage, compared with an average of $9.1 million for the same journey last year. That works out to $40.50 per barrel, about nine times last year’s rate.

Impact on Prices

• Freight now makes up more than 40% of the price of US oil at around $95 per barrel, compared with an average of 7% in 2025, according to LSEG data.

• Kenneth Medlock of the Baker Institute for Public Policy said every $10-per-barrel rise in shipping costs adds about 23 cents per gallon to US gasoline, and warned that the effect on food and goods prices builds up the longer the situation lasts.

• Import-dependent countries such as India, the Philippines and Indonesia bear the brunt, he said. The International Energy Agency said record tanker rates are already squeezing Asian refiners’ profits.

What Is Driving the Rise

Attacks on ships linked to the US-Iran and Russia-Ukraine wars have raised freight and insurance rates. Rates from the Strait of Hormuz and the Red Sea to Asia hit a record of around $34 per barrel this week, as shippers price in a risk premium. Ships are also taking longer routes, and shippers moving Saudi oil are using more vessels with ship-to-ship transfers, which reduces availability. Freight rates for some mid-sized tankers have quadrupled since the Iran war began in February, according to Signal Ocean.

Tanker Owners

Owners have earned as much as $1.3 million per ship per day on the Persian Gulf-Asia run, compared with $55,000 on average in 2025. Analyst Erik Broekhuizen of Poten & Partners said rates will remain strong while crude demand exceeds supply, but could fall quickly once the market loosens.