Venezuela Causes Tanker Rates to Explode—Will Oil Prices Follow?
The cost of transporting oil by tanker has suddenly soared, and the effects are spreading across many global routes. The trigger: The US has begun to exert more control over Venezuelan oil flows, shifting trade that was once handled by older, "gray" vessels to more legitimate tankers. As a result, competition for vessels has intensified, and rates have skyrocketed.
Ship owners now prefer to park tankers around the US Gulf because they perceive a greater chance of getting orders. As a result, vessels that would normally be on standby in the Middle East or near major production hubs are shifting to the Americas. When ships are concentrated in one area, other routes automatically lack vessels—and fares on long-distance routes like those to Asia also rise.
The rate spike is most noticeable on long-distance routes to China. Daily vessel revenues on the Middle East-China route have reportedly nearly tripled this year, while the US Gulf-China route has also seen a sharp increase. Even the Caribbean-US Gulf route has reached a two-year high, as oil flows in the Americas become increasingly competitive.
One example illustrates how "hot" this market is: an empty tanker willingly journeys for approximately 45 days from the Middle East to America to await orders in the US Gulf. This movement has led charterers to become more aggressive in offering higher rates to secure fast ships for short-term deliveries.
As ships are increasingly drawn to the US, oil shippers on non-US routes are also raising their rates to secure vessels. A Kuwaiti oil shipment deal to Singapore even closed at the highest rate this year, indicating that tariff pressures are starting to spread to Asia.
Future oil price prediction: Rising tanker rates could act as a cushion as logistics costs rise, making it more difficult for oil prices to fall significantly. However, upside room remains limited if global supply feels tight. In the near term, prices are likely to move sideways: Brent could potentially remain around $64–$67, while WTI is in the $59–$62 range. If supply disruptions worsen or tankers become scarce, Brent could test $68–$(asd)
Source: Newsmaker.id
