Record oil tanker rates put pressure on Asian refiners, IEA says
XLE•Record tanker freight rates are squeezing Asian oil refiners’ margins, the IEA said. Middle East Gulf-to-Asia VLCC rates reached about $36 a barrel by early October, more than five times their pre-war cost, while US Gulf Coast-to-China rates topped $37; margins for Asian refiners processing medium sour crude turned negative in September.
1. Freight costs squeeze margins
Record-high supertanker shipping costs are pressuring Asian oil refiners that rely heavily on Middle Eastern crude, the IEA said in its monthly report. The cost of moving a VLCC from the Middle East Gulf to Asia rose to around $36 a barrel by early October, more than five times its pre-war level; US Gulf Coast-to-China freight costs exceeded $37 a barrel. Higher delivered crude costs pushed September margins for Asian refiners processing medium sour crude into negative territory.
