Record-high tanker rates driven by the war in Iran are crippling United States crude flows to Asia, according to energy market reports, with freight costs for a US Gulf Coast to China voyage hitting $80 million earlier in October and remaining near $60 million. Valero Energy executives put the cost of moving crude from the US Gulf Coast to Asia at $30 to $35 a barrel, against a backdrop in which Asian orders for US crude for November delivery have plunged by about 50 per cent from September.

Brent near $117 as supply fears mount

Brent crude rose more than 6 per cent over the week to roughly $117 a barrel, while US crude finished above $103, as Houthi attacks on Saudi Arabia and fears of wider Middle East supply disruptions drove the rally. The physical market tells a more complex story: reports say the physical prices of some Middle East crudes sold outside the Persian Gulf have dropped, even as headline futures surge on supply fears.

What it means for buyers

The tanker squeeze matters because freight is now a large share of the delivered cost of US crude in Asia, pushing buyers toward other suppliers or shorter routes while the disruption lasts. With Brent holding near $117 and shipping costs still extreme, refiners face higher input costs that feed through to fuel prices, and traders will watch whether freight rates ease or whether the Gulf disruption pushes them higher still.