Oil shipping costs surge 467% since start of year

Maritime shipping costs have surged this year due to rising geopolitical tensions.

Maritime shipping costs have surged sharply this year, particularly for oil, driven by rising geopolitical tensions and tighter sanctions on Russia, disrupting global supply chains.

Freight rates for crude oil tankers on some major routes have jumped 467% since January, while liquefied natural gas (LNG) shipping costs have more than quadrupled, and iron ore freight rates have nearly doubled.

The increases defy the usual seasonal trend, as shipping costs typically decline at year-end due to weaker demand, Bloomberg reported.

Longer vessel turnaround times at sea have further strained the market, with several shipping executives forecasting tight vessel availability at least through the first quarter of next year.

Security concerns in key shipping lanes have also pushed costs higher, forcing some vessels to take longer alternative routes, while increased oil production in the Middle East has added to tanker demand.