Global oil and gas shipping rates surged to record levels as tensions escalated between the U.S. and Iran, with supertanker costs in the Middle East hitting all-time highs, according to shipping data and industry sources on Tuesday.
The spike comes after Tehran targeted vessels transiting the strategic Strait of Hormuz, a key chokepoint carrying roughly one-fifth of the world’s oil and significant quantities of liquefied natural gas (LNG).
Shipping through the Strait of Hormuz, which connects Iran and Oman, has slowed to a near halt following retaliatory strikes by Iran in response to U.S. and Israeli attacks.
The disruption, combined with fears of a prolonged closure, has driven oil and European natural gas prices higher, with Brent crude futures jumping nearly 10% this week amid multiple shutdowns of oil and gas facilities across the Middle East.
What the data is saying
The impact on freight rates has been dramatic, particularly for very large crude carriers (VLCCs) and LNG tankers:
- The benchmark freight rate for VLCCs shipping 2 million barrels of oil from the Middle East to China (TD3) reached an all-time high of W419 on the Worldscale measure, equivalent to $423,736 per day, according to LSEG data.
- The rate doubled from Friday, extending gains from a six-year high after the U.S. and Israel struck Iran, resulting in the death of Supreme Leader Ayatollah Khamenei.
- Daily freight rates for LNG tankers surged more than 40% on Monday after Qatar halted production, with Atlantic rates rising to $61,500 per day (up 43%) and Pacific rates climbing to $41,000 per day (up 45%), according to Spark Commodities.
The spike in shipping costs underscores the vulnerability of global energy supply chains to geopolitical tensions in the Middle East.
More Insights
Iran’s actions have further heightened market uncertainty:
- An Iranian Revolutionary Guards senior official claimed on Monday that the Strait of Hormuz is closed and warned that any ship attempting passage would be fired upon, according to Iranian media.
- The U.S. military’s Central Command, however, stated that the Strait is not closed, as reported by Fox News.
- In retaliation, Iran has struck Gulf countries, prompting precautionary shutdowns at oil and gas facilities across the region.
These developments have amplified concerns over supply disruptions, pushing freight rates and commodity prices higher.
What you should know
The rising international shipping and crude prices are already impacting downstream markets, including Nigeria:
- Dangote Petroleum Refinery has increased its Premium Motor Spirit (PMS) gantry price by N101, raising the ex-depot rate from N774 to N875 per litre.
- The refinery confirmed the adjustment followed recent volatility in global crude oil prices, which surged past $80 per barrel.
Petrol loading operations at the refinery were suspended effective midnight on March 2, 2026, as a precautionary response to the spike in crude oil prices.
