Red Sea chaos pushes fuel tanker costs above $100,000 a day

Some oil tanker earnings have soared above $100,000 a day as the disruption of shipments through the Red Sea persists. 

The cost to ship refined products from the Middle East to Japan added another 3% to $101,000 a day on Thursday, according to data from the Baltic Exchange in London. That’s the highest for that route since 2020, when a pandemic-induced glut saw traders rush to store oil on every kind of vessel they could find. 

Since mid-November, Yemen’s Houthi rebels have been steadily ramping up their attacks on shipping in the Red Sea. Oil tankers began to feel the impact when vessels were advised to stay away from the region following US and UK airstrikes, prompting a huge chunk of the merchant fleet to avoid the waterway. 

Since then, tanker rates for ships hauling fuels like gasoline, diesel and a refined product known as naphtha have boomed higher as vessels sail longer distances to either move cargoes to Asia or haul them thousands of miles around Africa. 

The move also shows up in earnings for ships hauling barrels from the Middle East to Europe. Depending on the size of the vessel, ships on that route now earn between $97,000 and $117,000 a day, data from the Baltic Exchange show. One such route was the highest since it began being published in September 2022.