Oil tanker rates continued to rise on Wednesday as concerns over further supply disruptions from US sanctions increased, according to a Reuters report.
Rates for tankers carrying oil also got a boost from increased demand from traders loading Middle Eastern crude grades for Asia.
Why oil tanker price is rising
According to the report, Shell had booked two Very Large Crude Carriers (VLCC) on Tuesday at the rate of Worldscale 70.
Worldscale is a unified system of establishing payment of freight rate for a given oil tanker’s cargo.
These VLCCs have the capacity to carry around 2 million barrels of oil. The two carriers were booked by Shell to load Middle Eastern crude in early February.
Additionally, Chinese refiner Shenghong Petrochemical also booked two VLCCs for the same loading period at the same rate, a shipbroker told Reuters.
The shipbroker further said that there could be more demand for tankers to load crude oil from Saudi Arabia in the coming weeks, which is likely to drive up freight rates.
Meanwhile, China’s Unipec had booked 10 tankers to transport oil from the Middle East, Reuters said.
Data showed that Unipec had booked around 23 vessels to transport crude oil from the Middle East to China.
Supertanker rates also up
Firm demand for the Middle East to China route has pushed up the rate for a VLCC.
A shipbroker said that the rate for VLCC rose by 15% from the previous day, bringing the cost to charter a supertanker on the Middle East to China route to $4.1 million.
Rates for supertankers on other routes have experienced a similar increase in rates, according to the report.
Additionally, the rate for VLCCs from the Middle East to Singapore increased by Worldscale 10.45 to WS71.80.
The route of West Africa to China saw an increase from WS9.23 to WS70.67, Reuters reported.
Similarly, crude oil shipments from the US Gulf to China will now cost around $8.715 million per journey.
This is up from $1.895 million from Tuesday, according to the report.
Meanwhile, Aframax tankers carrying Russian ESPO blend to China were quoted at $6 million to $6.5 million, which is five times higher than last week.
Crude product tanker rates shoot up 10%
Tanker rates for clean or refined crude products such as gasoline, diesel and jet fuel have also increased 10% since the beginning of this week, Reuters quoted data from SSY Tankers.
Reuters said that there were increased inquiries about product tankers before the US sanctions were imposed on Friday.
China was rushing to fulfill product requirements before the Lunar New Year at the end of January.
Meanwhile, the cost to transport around 40,000 tons of refined crude products from South Korea to southeast Asia has increased to $685,000 from $480,000 since the start of 2025, according to data from SSY.
A source told Reuters that fresh sanctions on some medium-range clean product tankers also drove up freight rates. These tankers can carry clean products of around 40,000 tons.
Additionally, the report said that fresh sanctions and higher rates for tankers were squeezing refining margins for Asian refiners.
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