Record Tanker Freight Rates Push Asian Refiners Away From US Crude Toward Middle East and Latin America

Tanker freight rates have soared to record highs, making US crude oil prohibitively expensive for Asian refiners and pushing them to seek alternative supplies from the Middle East and Latin America, according to multiple traders and shipbrokers who track those markets. The surge in rates is being driven by escalating risks to shipping in the Middle East, which is tying up tankers on longer routes and tightening the availability of vessels.

US crude exports remained elevated at 3.5 million barrels per day in September, edging up slightly from 3.4 million b/d in August, according to S&P Global Commodities at Sea data, but the figure sits well below the May peak of 4.4 million b/d. South Korea was the largest single destination for US crude in September at 568,600 b/d, followed by the Netherlands at 459,000 b/d, with Japan, France, Canada and the United Kingdom also among the top receivers.