Tanker Rates Hit Record as Strait of Hormuz Disruption Slashes Traffic

Tanker freight rates have surged to a record as restrictions on shipping through the Strait of Hormuz cut the number of available vessels.

Walter Bloomberg, citing S&P Global Energy, reported on August 31 that ship traffic through the Strait of Hormuz has fallen by more than 80% since war between the US and Iran began on Feb. 28.

The Strait of Hormuz is a key energy corridor that normally carries about 20% of global seaborne crude oil and liquefied natural gas shipments. The prolonged disruption has tightened tanker supply and pushed freight rates higher.

The benchmark freight rate for LR2 tankers traveling from the Middle East Gulf to Japan climbed to a record $107.72 a ton on August 27.