Oil Freight Rates Surge Over $20/bbl From Year Ago, Goldman Says — OPIS

The average global crude-oil freight rate has recently surged to more than $20/bbl higher than the level during the same time last year, a move that could reduce refiners' overall demand for crude or skew it toward more closely located suppliers, Goldman Sachs energy analysts said.

The investment bank said the rally in crude freight rates initially began in the very large crude carrier segment and on Middle Eastern routes, but it has since spread to all major crude trading routes, particularly affecting long-haul voyages around the world.

Goldman said there are five drivers behind the $20/bbl year-on-year increase in the average global shipping freight rate, which is calculated based on its 14-day moving average.

They are: Strait of Hormuz crossing risk premium ($7); Ship-to-ship transfers outside of the Persian Gulf that tie up tankers for longer ($4); higher maritime bunker fuel prices ($4); inefficient tanker allocation and increased tanker redirections ($3); and the blockage of the Iranian fleet that boosts demand for non-sanctioned tankers ($2).

The bank said crude producers that rely heavily on distant buyers may have to discount their supplies more heavily to retain demand from refiners facing high transportation costs. They include Middle East producers that sell oil to refiners in Asia and U.S. producers of West Texas Intermediate crude sold to Europe or East Asia.

On the other hand, prices of crude from more centrally located producers may gain from some demand reallocation, like those producers that are selling Brent crudes in northwestern Europe or ESPO in Russia, Goldman said.

Meanwhile, refiners that reply on imported crude from distant suppliers such as Asian refiners would have to either pass higher freight costs onto final consumers or accept lower net refinery margins, the bank said.

Goldman said high freight costs have weighed particularly heavily on Asian refineries' net margins, as oil demand in countries like China is more flexible because of alternative fuels such as electrons for EVs, threatening Asian fuel production and potentially raising global refined product prices.

"Overall, we see high freight rates widening crude price differentials by changing crude trading patterns and supporting refined product prices, while suppressing refiners' net margins," the bank said.

On Thursday, Valero Energy's vice president of crude, feedstocks supply and trading, Randy Hawkins, said in an analyst call that a sharp increase in freight rates since the start of the Iran war has forced some refiners to scramble for nearby crude feedstock supply, with some oil producers discounting their supplies to account for the higher freight cost.

The cost to move a very large crude carrier, which typically carries 2 million bbl from the U.S. Gulf Coast to Asia, is now around $30-35/bbl, up from a 2025 average of around $5/bbl, he said.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

-- Reporting by Frank Tang, frank.tang@dowjones.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

October 23, 2026 13:40 ET (17:40 GMT)