The price of physical oil is being pushed higher by a critical shortage of available tankers, as ship-to-ship transfers outside Hormuz tie up the very large crude carrier (VLCC) fleet. Freight rates for the Persian Gulf to Far East route reached a record $1.4 million per day, up from less than $50,000 a year ago. This vessel drain has caused costs to spike globally; a VLCC charter from the US Gulf Coast to Asia-Pacific recently hit a historic high of $81 million lumpsum, while shipping costs from West Africa to China jumped from $6.50 per barrel in July to $27.22.
Tuesday, October 20, 2026
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Physical Brent Crude Hits $136 After Riyadh Missile Strikes
Commodities12 days ago
A direct hit on a commercial aircraft and multiple explosions in the Saudi capital have triggered a rally in the spot oil market. Dated Brent crude was assessed at $136.07 per barrel on Oct. 8, with the physical differential rising to $18.95 per barrel. This price surge follows Houthi missile attacks on Riyadh and an increase in vessel strikes within the Strait of Hormuz, which have left market participants highly sensitive to further geopolitical escalation.
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