The Middle East conflict has increased the risk of transporting fuel through the Strait of Hormuz, leading to a surge in shipping costs.

Gate News bot message: Due to the increased risks of transporting fuel through the Strait of Hormuz due to the skirmishes between Israel and Iran, the freight rates for tankers carrying refined oil from the Middle East have surged in recent days.

According to data from the Baltic Exchange, fuel transportation costs from the Middle East to East Asia have risen by nearly 20% over the three trading days leading up to Monday. Meanwhile, freight rates to East Africa have increased by more than 40%. With no signs of easing hostilities between Israel and Iran, tanker owners and managers have been suspending vessel quotes for the Middle East region.

There have been no significant attacks on commercial shipping in the Persian Gulf, but the market is tense. Major exporters in the region, such as Saudi Arabia and the UAE, transport oil to international markets via this route.

Ship brokers and shipowners indicate that indicative levels suggest continued increases in freight rates on Tuesday.

Source: Bloomberg