Samar El-Sayed_ Recent data issued by the International Energy Agency (IEA) indicated that the record surge in maritime freight costs for oil has extended its repercussions to global tanker markets, causing severe pressure on refinery profitability, particularly in Asia, which relies heavily on crude supplies coming from the Middle East.
Data issued today explained that with vessels spending prolonged time on crude oil transport routes disrupted by Middle East tensions, demand spilled over to smaller tankers, rather than relying on Very Large Crude Carriers (VLCCs).
In this context, charterers resorted to splitting crude shipments onto smaller "Suezmax" and "Aframax" tankers, driving up demand for these two types of tankers.
The data added that during the third quarter of 2026, demand for "Suezmax" and "Aframax" tankers, measured on a "tonne-mile" basis that takes into account shipment volume and distance traveled, rose by about 20% compared to the corresponding period last year.
The data noted that by mid-October, the cost of shipping crude oil from West Africa to Europe aboard a "Suezmax" tanker exceeded $22 per barrel, representing more than four times its pre-conflict levels.
Charter rates for "Aframax" tankers in the North Sea also tripled, exceeding $6 per barrel.
This impact extended to the oil product tanker market, as exceptionally high profits in the crude oil shipping sector encouraged some vessel owners to use "Long Range 2" (LR2) tankers—the largest vessels typically used for long-distance oil product transport—to carry crude oil instead.
Freight rates for "Long Range 1" (LR1) tankers heading from the Arabian Gulf to Japan reached nearly $27 per barrel in mid-October, marking a fivefold increase from pre-conflict levels.
The data highlighted that VLCC charter rates on the Arabian Gulf to Asia route soared, surpassing $1.3 million per day by mid-October.
The Agency considers that extremely high freight cost levels could eat into the profits refineries typically generate from processing crude oil into petroleum products.
It mentioned that the surge in crude oil shipping costs during last September pushed refining margins for Asian refineries processing Middle Eastern crude into negative territory.
