How much does shipping oil from the Persian Gulf cost now?

Average tanker rate premiums are currently +150% above pre-crisis, with average delays of 20 days. War risk insurance has increased by 10×.

Why are tanker rates so high?

Elevated due to war-risk insurance premiums (up to 10× normal), rerouting via longer alternative passages, and vessel scarcity as ships avoid the Strait of Hormuz. Bunker fuel costs have also risen significantly.

What alternative shipping routes are available?

Key alternatives include routing via the Cape of Good Hope (adds 10-15 days), the Saudi East-West Pipeline to Yanbu, or the UAE Habshan-Fujairah Pipeline. Each carries cost and capacity penalties.

Will shipping costs come down in 2026?

Costs will remain elevated until the Strait of Hormuz situation resolves. Key triggers include diplomatic breakthrough, military de-escalation, and alternative-infrastructure expansion.

What is a VLCC tanker rate premium?

A VLCC (Very Large Crude Carrier) rate premium is the additional cost above normal charter rates due to elevated risk: war-risk insurance, crew hazard pay, and rerouting fuel costs.

Route Cost Projections

Updated 2026-08-24 · Confidence 85% · Valid until 2026-08-25

Executive summary

Shipping costs are projected to remain extremely high over the next 90 days due to the ongoing, severe disruption in the Strait of Hormuz, driving up fuel prices, war risk premiums, and tanker rates. While some oil prices show slight dips, the overall trend is upward, exacerbated by critical geopolitical events.

Route cost projections

Persian Gulf to Rotterdam (Crude Oil)

Origin: Ras Tanura, Saudi Arabia → Destination: Rotterdam, Netherlands. Premium: +700%. Alternative: Cape of Good Hope. Primary cost driver: War Risk Insurance, Fuel, Rerouting.

30-day projected cost: 12.5
60-day projected cost: 13

Persian Gulf to Shanghai (Crude Oil)

Origin: Jebel Ali, UAE → Destination: Shanghai, China. Premium: +775%. Alternative: Cape of Good Hope. Primary cost driver: War Risk Insurance, Fuel, Rerouting.

30-day projected cost: 11
60-day projected cost: 11.5

US Gulf Coast to Europe (Refined Products)

Origin: Houston, USA → Destination: Antwerp, Belgium. Premium: +87.5%. Alternative: N/A (Direct Atlantic). Primary cost driver: Fuel Costs, Increased Demand for Non-Hormuz Routes.

30-day projected cost: 1.6
60-day projected cost: 1.7

Global shipping metrics

Average tanker rate premium: +150%
Average delay: 20 days
War-risk insurance multiplier: 10×
Bunker fuel cost change: 10%

Cost reduction triggers

De-escalation of geopolitical tensions in the Strait of Hormuz allowing for safe passage. — probability 10%, potential cost reduction 60%
Significant and sustained drop in global crude oil prices (Brent below $80). — probability 15%, potential cost reduction 15%
Successful diplomatic resolution to regional conflicts. — probability 5%, potential cost reduction 70%

Methodology

Bottom-up cost modeling incorporating fuel surcharges, insurance premiums, war risk premiums, port congestion delays, and alternative route distance penalties.

Analyst note

The maritime logistics landscape is currently dominated by the severe and ongoing crisis in the Strait of Hormuz. With 800 tankers blocked and 4.5M bbl/day of oil supply disrupted, the impact on crude oil and related product shipping is catastrophic. VLCC tanker freight rates have skyrocketed by 94% to $423,736, reflecting the extreme demand for available vessels and the exorbitant war risk premiums. Brent Crude and WTI Crude are both experiencing significant daily increases, pushing bunker fuel costs higher. The 'critical' and 'high' geopolitical events indicate continued instability. The Disruption Index is rising, reinforcing the expectation of sustained high costs. Over the next 90 days, we anticipate a continued upward trend in shipping costs for routes originating or transiting the Middle East, driven primarily by war risk insurance, extended transit times via alternative routes (Cape of Good Hope), and elevated fuel prices. Even routes not directly impacted by Hormuz will see increased costs due to overall market tightening and higher fuel. There is a low probability of significant cost reduction within this timeframe given the entrenched nature of the crisis.

Frequently asked questions

How much does shipping oil from the Persian Gulf cost now?: Average tanker rate premiums are currently +150% above pre-crisis, with average delays of 20 days. War risk insurance has increased by 10×.
Why are tanker rates so high?: Elevated due to war-risk insurance premiums (up to 10× normal), rerouting via longer alternative passages, and vessel scarcity as ships avoid the Strait of Hormuz. Bunker fuel costs have also risen significantly.
What alternative shipping routes are available?: Key alternatives include routing via the Cape of Good Hope (adds 10-15 days), the Saudi East-West Pipeline to Yanbu, or the UAE Habshan-Fujairah Pipeline. Each carries cost and capacity penalties.
Will shipping costs come down in 2026?: Costs will remain elevated until the Strait of Hormuz situation resolves. Key triggers include diplomatic breakthrough, military de-escalation, and alternative-infrastructure expansion.
What is a VLCC tanker rate premium?: A VLCC (Very Large Crude Carrier) rate premium is the additional cost above normal charter rates due to elevated risk: war-risk insurance, crew hazard pay, and rerouting fuel costs.

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