Oil Freight at $100,000 Piles Pressure on Crude Markets
- Freight rates in many routes surged to highest level this year
- Not enough signs of Chinese spot crude buying getting active
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Soaring shipping costs are piling pressure onto physical oil markets that are already being hit by uncertainty surrounding a cap on Russian crude prices and weak Chinese buying.
Earnings on the industry’s benchmark trade route breached $100,000 a day on Monday, the highest since early 2020 when Covid-19 caused a surge in tankers storing cargoes. With sanctions on Russia now forcing ships to take longer routes -- drying up the pool of available vessels -- oil companies and traders are having to pay ever-higher prices to transport cargoes. That’s adding to the cost of crude.