Surging Oil Tanker Rates Tipped to Climb Higher on Iran Tensions

Rates for hiring oil supertankers are surging and could climb even higher due to growing tensions between the United States and Iran, according to a report from maritime news site gCaptain. The cost to charter 'very large crude carriers' (VLCCs) - the largest oil tankers - has spiked in recent weeks, with rates reaching around $300,000 per day. This is the highest level since 2015, and analysts say the rates could climb further as the risk of a major US attack on Iran increases. 'The risk premium is really starting to kick in,' said Peter Sand, chief shipping analyst at industry group BIMCO. 'We're not at the highest levels yet, but we're getting there.' The rising costs are being driven by a few key factors, according to the report: 1. **Geopolitical Risk**: Tensions between the US and Iran have escalated sharply in recent months, raising the threat of disruptions to oil shipments in the Strait of Hormuz - a critical chokepoint for global oil trade. This is causing charterers to demand higher rates to compensate for the risk. 2. **Vessel Availability**: The global VLCC fleet has become more concentrated, with a smaller number of owners controlling a larger share of the vessels. This reduces available capacity and allows owners to demand higher rates. 3. **Seasonal Demand**: Typical seasonal patterns are also contributing, with higher winter demand for heating oil and other refined products driving up tanker rates. 'The market is very tight at the moment,' said Sand. 'Owners are in a strong position to push rates higher.' The surging tanker rates come at a challenging time for the global shipping industry, which is already grappling with softer demand and the upcoming IMO 2020 regulations on marine fuel emissions. Industry analysts say the tanker market volatility is a reminder of the importance of geopolitical risk factors in the maritime sector. Sources: [gCaptain](https://gcaptain.com/surging-oil-tanker-rates-tipped-to-go-even-higher-on-iran-risk/)