$44.8 million per shipment! The cost of transporting US crude oil to Asia hits a record high

According to Jinse Finance APP, as Middle Eastern supply disruptions intensify and buyers rush to secure energy sources, the cost of transporting American crude oil to Asia has soared to a new record.

According to data from the Baltic Exchange, as of Tuesday, the cost of chartering a Very Large Crude Carrier (VLCC) to transport 2 million barrels of crude oil from the US Gulf Coast to China has reached about $44.8 million, setting a historic high and surging sharply from $39 million the previous day. Before the outbreak of the Iran conflict at the end of February, this cost was only about $17.8 million.

As the supply gap caused by the conflict impacts the market, US crude continues to support global supply. This week, Saudi Arabia shut down its East-West oil pipeline—a major route to bypass turmoil in the Strait of Hormuz sparked by the Iran conflict. This situation makes US supply even more critical, and the record-high shipping costs have hardly deterred Asian buyers. The ongoing conflict is reshaping the global energy flow landscape.

Despite this, transoceanic trade remains viable because US benchmark West Texas Intermediate (WTI) crude delivered to Asia is still cheaper than competing sources such as the UAE’s Murban crude. As long as this price advantage exists, buyers are likely to continue bearing higher-than-usual shipping costs.

While Gulf Coast shipping costs surge, global tanker freight rates are also on the rise, with little sign of this trend reversing. Many vessels are reluctant to travel routes with attack risks, tightening shipping capacity through key channels like the Strait of Hormuz. Meanwhile, robust fuel demand means refiners will continue to buy and ship any crude oil they can obtain, as processing it into refined products like diesel and gasoline remains profitable.

Data from research firm Kpler shows that in October, six VLCCs are scheduled to load crude oil from the US Gulf Coast for shipment to Asia.