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Shell has put a number on one of the hidden costs of the Middle East shipping crisis. The oil major said on Thursday 29 October that soaring freight rates added $5.4 billion to its shipping lease costs in the third quarter compared with the previous three months, an increase that feeds into its net debt. TotalEnergies reported a parallel squeeze, with its chief executive saying freight costs had jumped from about $2–$3 a barrel to around $25 a barrel.

Why moving oil suddenly costs so much

Spot rates for oil tankers hit an all-time high in early October, according to Reuters. Middle East producers have been moving crude out of the Strait of Hormuz using shuttle services and ship-to-ship transfers, a workaround that ties up vessels for longer and leaves fewer tankers available for other work. Shell's finance chief said the route between the Middle East and China now costs roughly ten times what it did a year ago, and that the pressure is already showing up in refining margins as well as shipping.

What it means for profits and prices

The freight surge did not stop either company reporting strong third-quarter results, with Shell posting a $10.81 billion profit, its highest since 2022, on stronger refining margins and higher liquefied natural gas prices. But TotalEnergies said shipping costs were the main reason its liquids price realisation fell by $6 a barrel in the quarter versus the previous three months. Across the first nine months of 2026, Shell said cumulative increases in shipping leases were $8 billion higher than in the same period of 2025. For consumers, the lesson is that even if crude prices ease, the cost of getting oil to market can keep fuel and energy prices under pressure while the shipping disruption lasts.

Sources: Reuters; Reuters.