Costs in oil transportation are testing new record levels.
According to Bloomberg, renting a tanker from the US targeting China has now become more expensive than launching a rocket into space.
According to information provided by ship brokerage firm Gibson this week, a trip for that route costs approximately $80 million, while a standard SpaceX Falcon 9 launch costs $74 million.
For the same amount of money, a tanker with almost the same characteristics could be purchased directly earlier this year.
These eye-popping prices come as a result of a global tanker shortage that worsens with every additional barrel of oil that passes through the Strait of Hormuz.
During this weeks-long process, supertanker markets have been in the middle of a boom like industry veterans have never witnessed before.
Brokerage firm SSY says that even after adjusting for inflation, freight rates are the highest since the first supertankers sailed the world's oceans in the 1960s, surpassing even the "tanker wars" of the 1980s, when Iran and Iraq attacked commercial shipping in the Persian Gulf.
Russell Hardy, Chief Executive Officer of Vitol Group, the world's largest independent oil trader, made the assessment at a conference he attended this week, "There really are not enough ships in the market, we are facing a very parabolic pricing."
The negative impact of the war initiated by the USA and Israel is seen on prices
This jump in prices creates new chaos for the oil market, which has been trying for months to adapt to the historic disruptions caused by the Iran war.
Rising transportation costs make crude oil more expensive for buyers, eroding refinery margins and increasing inflationary pressures in energy markets.
At the heart of this explosion is a simple problem: There are not enough tankers to efficiently carry all the barrels that need to be moved.
Middle Eastern producers have become increasingly reliant on operations to move oil out of Hormuz and onto other ships as the Iran war reshapes the region's trade flows.
These transit journeys, whose impact has increased as shipments via Hormuz have reached nearly 80 percent of pre-war levels, are straining the global fleet, sometimes adding nearly a week to each voyage, according to industry executives.
The intermittent nature of trade flows made this shortage even more acute. When traffic in Hormuz collapsed, tankers sailed idle for weeks from the Middle East to other parts of the world in search of work.
As Gulf shipments pick up again, ships must reposition themselves, and this process can take weeks.
The virtual halt of Iran's exports to China has also increased this pressure, forcing Chinese buyers to source crude oil from elsewhere, increasing demand for tankers operating in the main market.
Capacity is further squeezed by Iranian attacks, which have taken ships out of service for repairs, while some ships are adding thousands of miles to their journeys around Africa to avoid Houthi attacks. “We've seen extraordinary freight markets before, but the speed, size and breadth of this rally is truly remarkable,” said Lauren Gallinari, head of business intelligence at shipbroker MJLF & Associates.
Freight squeeze and its reflection on oil prices
Freight, once a small medium-sized cost item, has now become gigantic when measured relative to overall crude oil prices.
A booking from the United States this week was accepted at a rate equivalent to a transportation cost of $41 per barrel; whereas last year the average transportation cost for the same route was $4.50.
This amount corresponds to approximately 45 percent of the price of West Texas Intermediate (WTI) futures, which traded around $91 per barrel on Friday.
