Oil shipping costs spike, lifting prices from pump to grocery
USO•A U.S.-to-Japan crude voyage is expected to cost $81 million in late November, versus an average $9.1 million last year. An economist estimates each $10-per-barrel increase in shipping costs adds about 23 cents per gallon to gasoline.
1. Voyage costs surge
The supertanker Esteem Explorer is scheduled to carry about 2 million barrels of crude from the United States to Japan in late November at a shipping cost of $81 million, or $40.50 per barrel. The same voyage cost an average of $9.1 million last year. Freight costs now account for more than 40% of U.S. oil’s price, based on a price of about $95 per barrel, compared with an average of 7% in 2025.
2. Higher costs spread
Kenneth Medlock of the Baker Institute for Public Policy said every $10-per-barrel increase in shipping costs adds about 23 cents per gallon to gasoline. He said higher transport costs can gradually filter through to grocery and retail prices. Countries that depend on oil imports, including India, the Philippines and Indonesia, bear the brunt of higher costs, Medlock said.
3. Routes and vessel supply
Attacks on ships related to the U.S.-Iran and Russia-Ukraine wars have pushed up freight and insurance rates. Rates for moving oil from the Strait of Hormuz and the Red Sea to Asia reached about $34 per barrel this week, while longer routes and ship-to-ship transfers have tied up vessels and reduced availability. Tanker owners have earned as much as $1.3 million per ship per day for a Persian Gulf-to-Asia round trip, compared with an average of $55,000 per day in 2025.
