Supertanker Fee on Benchmark Route Nears $500,000 a Day

The cost of hiring a supertanker to carry oil on the benchmark Middle East-to-China route has approached $500,000 a day, as the Iran war continues to deter many shipowners from entering the Strait of Hormuz. This route, known as TD3, was previously assessed at $200,000 a day before the war. The latest increase comes after South Korea’s Sinokor Group provisionally hired out one of its ships to pick up a cargo from inside the Persian Gulf to Asia at a high rate. With vessels sporadically coming under attack while trying to cross Hormuz, the number of shipowners willing to call at ports inside the Persian Gulf has dwindled. Many of the voyages from inside the Gulf are being conducted on ships controlled by Middle Eastern producers, Sinokor, or a handful of smaller risk-tolerant shipping companies willing to enter the contested waterway. This has lowered the number of publicly available deals on the route, making it less liquid and trickier to assess the primary benchmark for supertanker earnings. On August 7, the Baltic Exchange assessed earnings on the Middle East-to-China route at $498,000 a day, which equates to 490 industry-standard worldscale points. A week earlier, TD3 was assessed at $428,000 a day. Owners willing to load inside Hormuz are earning a scarcity premium, with earnings for ships loading in the Gulf of Oman to sail to Asia lower, at about $147,000 a day.