The rising costs of transporting oil across the globe are making some long-distance oil trades unprofitable, which could disrupt supply chains at a time when fuel markets are already very tight.
This spike in costs is largely due to a lack of available supertankers. Many shipping routes are experiencing a shortage of these massive vessels, which are each as long as three football fields. This shortage is making it more appealing for refiners to purchase oil from nearby sources rather than from distant locations.
For example, shipping oil from Houston to Asia now incurs an extra charge of about $26 per barrel, totaling around $52 million for a single shipment. This added cost represents roughly a quarter of the price for West Texas Intermediate crude oil futures. Before the onset of the recent conflict, shipping expenses typically formed just a small part of the overall oil costs.
