Randy Hawkins, Valero Energy’s vice president of crude, feedstocks supply and trading, said the rise in freight rates since the start of the Iran war had left some refiners scrambling for crude supplies closer to home. Moving a very large crude carrier from the U.S. Gulf Coast to Asia now costs $30–35 per barrel, compared with around $5 per barrel in 2025, he said.
The shipping market is pricing a far more divided oil trade than the crude market once did. Average global crude-oil freight rates have climbed to $30 a barrel from $4 a year ago, according to Goldman Sachs estimates. Rates on Middle Eastern routes have reached $35 a barrel.
The surge began with very large crude carriers and Middle Eastern routes, then extended to every major crude trading route. A very large crude carrier typically carries 2 million barrels.
Goldman Sachs identified five elements in the year-on-year increase: a $7-per-barrel risk premium for crossing the Strait of Hormuz; $4 for ship-to-ship transfers outside the Persian Gulf; $4 from higher maritime bunker fuel prices; $3 from inefficient tanker allocation and more redirections; and $2 from the blockage of the Iranian fleet. The bank’s analysts said ship-to-ship transfers were the main force behind the freight rally, as tankers were diverted to move crude beyond high-risk areas in the Persian Gulf.
Tanker availability is central to the cost. Of 923 very large crude carriers globally, approximately 120 Iranian vessels are effectively unavailable to conventional charterers.
One estimate put tanker scarcity at roughly half of the current premium, with inefficient shipping routes and ship-to-ship transfers contributing another 20%.
The result is a widening gulf between crude prices that would once have competed more directly. Murban, loaded at Fujairah outside the strait, now commands a $43-a-barrel premium over Basrah, loaded inside the Persian Gulf. The premium was just $2 in February.
Dated Brent is trading at a $40-a-barrel premium to comparable West Texas Intermediate crude and at a $24-a-barrel premium to Dubai crude. Its basis has reached 27%, reflecting stronger demand for supplies that European and Mediterranean refiners can reach more readily.
Higher transport costs are changing buying decisions. Refiners are favouring grades produced closer to their destinations, reducing their exposure to expensive long-haul shipments. That shift is fragmenting what had been a more integrated global market into regional trading pools.
The pressure falls unevenly. Middle East producers selling to Asian refiners, along with U.S. producers selling West Texas Intermediate to Europe or East Asia, may need deeper discounts to keep buyers. Producers of Brent crudes in northwestern Europe and ESPO in Russia may benefit as buyers reallocate demand.
Asian refineries have been hit particularly hard in their net margins. They face a choice between passing higher freight costs on to final consumers and accepting lower net refinery margins.
Oil supply from the Middle East has remained resilient despite escalating tanker attacks. Yet Goldman Sachs said elevated freight rates are widening crude-price differentials, supporting refined-product prices and suppressing refiners’ net margins. Transportation costs have become a major obstacle to lower oil prices because they raise the delivered price of crude while squeezing refinery margins.
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