Record Tanker Rates Choke U.S.-to-Asia Crude Flows

Shipping costs for moving U.S. Gulf Coast crude to China spiked as high as $80 million earlier this month, roughly ten times pre-war averages, as the Iran conflict crippled tanker availability and sent freight rates to records.

The squeeze has rippled into refined products too, with Singapore's high-sulphur fuel oil now trading above the crude used to produce it, a rare inversion driven by disrupted Middle East and Russian supply alongside resilient bunker demand.

Seasonal relief from Gulf producers and expanded Chinese export allowances may ease pressure by year-end, but until replacement cargoes become cheaper to transport, Asian buyers face elevated landed costs on both crude and fuel oil.