Tanker rates surge, container lines monitor Mideast after US bombs Iran

Spot rates for the largest crude oil tankers from the Persian Gulf to China have surged 50% in the past week on heightened Middle East tensions, but major container lines continue sailings through the region despite threats by Iran to close the vital Strait of Hormuz.

Rates for ultra large crude carriers (VLCCs) on the Middle East Gulf to the Far East were climbing even before the United States bombed Iran’s nuclear facilities on June 21.

The rate for a 270,000-metric ton tanker surged 22 points, or about 50%, on the Worldscale (WS) global index to about 75, on a baseline of 100. This translates to a roundtrip time charter equivalent (TCE) of more than $57,000 per day, according to published reports. 

That rate was approximately $21,000 per day as of June 11.

Crude oil futures reached $76.42 Sunday, up from the previous close of $73.84. 

The Iranian parliament on Sunday approved a measure to close the Strait of Hormuz, the narrow gateway from the Gulf to the Arabian Sea and worldwide shipping lanes. Approximately 17 million barrels per day — or one in four barrels of the world’s production — pass through the waterway each year, according to the Strauss Center for International Security and Law at the University of Texas.

On Sunday U.S. Secretary of State Marco Rubio called on China, the biggest customer for Iranian oil, to prevent Tehran from closing the strait.

Iran’s security regime would have to sign off on a closure, which last occurred in 1984.

Gulf nations account for 2-3% of annual global container volumes, and shipping lines are tracking developments.

“We continue to monitor the situation very closely, especially considering the U.S. involvement in the conflict,” Maersk of Denmark said in an advisory. “At the moment sailing through the Straight [sic] of Hormuz continues, but we are ready to re-evaluate this based on information available. Equally, we will continuously monitor the security risk to our specific vessels in the region and are ready to take operational actions as needed.”

French-based CMA CGM said “shipping activities are proceeding as normal in the area, and that our operations and logistics chains remain unchanged. We continue to ensure full service coverage across all routes and ports of call.”

Find more articles by Stuart Chirls here.

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