Tanker availability along the US Gulf Coast has fallen sharply, with net vessel availability down 41% over the past month according to The Signal Group. The disruption traces directly to the Iran war, which has stalled tanker movements through the Strait of Hormuz and cut off Middle Eastern crude flows to Asian and European refiners.
VLCC availability on the US Gulf Coast halved in a month, dropping from 20 vessels on March 1 to just 10 as of last week. Suezmax tankers are down 40-45% since January, while Aframax supply has collapsed roughly 70% from its mid-February peak. The scramble has sent freight rates to historic highs: Suezmaxes and Aframaxes are now earning upwards of $300,000 per day, compared to a $60,000 average over the prior five months, according to Aristidis Alafouzos, CEO of Okeanis ECO Tankers.
The surge in US Gulf Coast fixture activity is being driven by refiners in Pakistan, South Korea, and China rerouting demand. US WTI crude is trading at a $10-plus discount to Brent, making American barrels attractive replacements for stranded Middle Eastern supply. At least 10 vessels were fixed from the US Gulf Coast to Asian markets in the past seven days alone.
Economists and analysts warn the freight rate surge will cascade through consumer prices globally, as higher shipping costs are passed on via the cost of everyday goods. The EU energy commissioner has stated that oil and gas prices are unlikely to return to normal soon, citing sustained pressure on diesel and jet fuel supplies even beyond the immediate conflict.