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2026 FIFA World Cup
17JUN

Supertanker hire passes $1.2m a day

4 min read
10:21UTC

Hiring a supertanker to carry Saudi crude to China passed $1.2 million a day for the first time on record in the week to 25 September, a 43 per cent rise in fifteen days. Brent November futures went the other way, from $107.35 a barrel to $97.68 in two days.

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Key takeaway

Freight set a record while crude fell, so the war premium now arrives at the pump.

Hiring a supertanker to carry Saudi crude to China passed $1.2 million a day for the first time on record in the week to Friday 25 September 2026⁠1. Fifteen days earlier the same run paid $862,150 a day, a rise of 43 per cent⁠2. The trade quotes that rate on an index called Worldscale, where 100 is the notional break-even cost of a voyage, recalculated each January for every route. The Ras Tanura to Ningbo run is the Baltic Exchange's benchmark, and it was assessed at Worldscale 1,157.5 against 821.11 on 10 September, roughly eleven and a half times the baseline⁠3. Brokers on a daily panel set that figure, and no cargo transacted at it.

Crude climbed over the same span and then surrendered the gain. Brent November futures stood at $107.35 a barrel shortly before 08:00 GMT on Monday 28 September, after President Donald Trump rejected Iran's offer to reopen the strait⁠4. They settled that session at $105.28 and stood at $97.68 at 22:47 UTC on Wednesday 30 September, roughly 9 per cent below the peak⁠5.

Refiners and shipowners meet those two prices at different points in the chain. The refiner buying the cargo pays the freight, not the shipowner carrying it, so the cost lands in the delivered price of a barrel rather than in the Brent headline. It then reaches the pump. American retail diesel averaged $6.382 a gallon in the week to 28 September, 70 per cent above a year earlier, against 43 per cent for petrol⁠6. Buyers are still taking the cargo: India's September imports ran at 575,000 barrels a day from Iraq and 566,000 from Saudi Arabia, back to pre-conflict rates⁠7.

Underwriters add a second charge the crude quote never shows. War-risk cover is priced as a percentage of what the ship itself is worth and charged per voyage, so 3 per cent on a $100m tanker is $3m for a single trip. Calls at Yanbu on the Red Sea have tripled to about 3 per cent from under 1 per cent in early July 2026⁠8. Southern Saudi ports stand at 7 per cent, and Hormuz runs at 6 to 9 per cent on assessments from Lloyd's List Intelligence and Dryad Global, and at 7.5 to 12.5 per cent on another market report the same week⁠9. Underwriters are quoting the same transit at two different prices, which means the market has not settled what the risk is worth. Rerouting to the Red Sea was the escape from the strait, and Aramco has already pushed barrels that way, but the underwriters have priced most of the saving away.

Deep Analysis

In plain English

There are two separate prices in an oil cargo. One is the price of the oil itself, quoted as Brent crude. The other is the cost of hiring the ship to carry it, called freight, which is quoted per day. In the week to 25 September 2026 the cost of hiring a supertanker to take Saudi crude from Ras Tanura to Ningbo in China passed $1.2 million a day, the highest on record, up 43 per cent in a fortnight. Over the same period the oil price went the other way: Brent fell from $107.35 a barrel on 28 September to $97.68 on 30 September. That looks contradictory and is not. The oil price moved on diplomacy, falling back after a three-day jump that followed President Trump's rejection of Iran's plan to reopen the strait. Freight moved on physical reality, because fewer owners will send a ship through a war zone and insurance on the voyage now costs millions. A buyer in Asia pays both bills, and this month the shipping bill rose faster than the oil bill fell.

Deep Analysis
Root Causes

Three conditions have to hold together for a single voyage to clear at this level: enough owners refusing Gulf business to shrink the available fleet, an insurance market quoting Hormuz transits at 6 to 9 per cent of hull value, and a buyer with no substitutable grade. Each on its own would move the rate a little; together they remove the owner's incentive to compete on price.

Saudi Arabia's East-West pipeline was down from 10 to 22 September 2026, which removed the only large line carrying Saudi crude to the Red Sea without passing the strait. With the bypass gone, loadings moved to Ras Tanura inside the Gulf, so every barrel had to cross Hormuz and bid for the same scarce tonnage.

Escalation

Sideways on price, up on cost. Brent giving back its war premium while 135 ships sat holding position off the strait on 30 September shows traders pricing the diplomacy rather than the physical flow. The mechanism that would break the pattern is a cargo loss rather than a hull loss: a laden very large crude carrier sunk or burnt out would reprice both markets together, because it would put insurers rather than traders in charge of whether the voyage happens at all.

What could happen next?
  • Consequence

    At this level the freight on a single Gulf to China voyage exceeds the ship's annual insurance cost, and the bill lands on the refiner rather than the shipowner.

    Immediate · Assessed
  • Meaning

    Brent falling 9 per cent below its 28 September peak while the freight record was being set shows the crude benchmark tracking negotiations and the freight market tracking the water.

    Immediate · Assessed
  • Risk

    Fujairah's bunker fuel stocks fell by 1.69 million barrels in a week, so the port the detour depends on is drawing down the supply that makes the detour possible.

    Short term · Reported
  • Opportunity

    Owners willing to take Gulf business are earning rates that will fund newbuilding orders, which would add tonnage to the market long after the risk that created the rate has gone.

    Long term · Suggested
Sources:Splash247, reporting Baltic Exchange assessments·Al Jazeera·straits.live
Mentions:China →Baltic Exchange →Ras Tanura →Worldscale →Donald Trump →Yanbu →Strait of Hormuz →Lloyd's List →EIA →Fujairah →India →Iraq →Saudi Arabia →Turkey →Kpler →COSCO →Iran →TD3C →Red Sea →Ningbo →Washington →
First Reported In

Update #180 · Washington left Iraq as it answered Tehran

Splash247, reporting Baltic Exchange assessments· 1 Oct 2026
Read original →
Causes and effects
This Event
Supertanker hire passes $1.2m a day
The crude price says the crisis is easing and the freight price says it is not, and the freight is the one a refiner has to pay.
Led to
IEA: Gulf-Asia freight tops $37 a barrel
Gulf-to-Asia freight rose past $37 a barrel after September's record supertanker earnings.
Occurred 21 Oct 2026
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.