The unprecedented increase in the cost of shipping crude oil from West Africa to China has created new challenges for the global oil market. The cost of transporting a 2 million barrel shipment of oil from West Africa to China on September 18, 2026, has reached $23.59 per barrel. In contrast, the cost of shipping the same cargo in July was only $6.50 per barrel. Thus, the shipping cost has increased by 258% to approximately $47.18 million in about two months.
Impact of Increased Shipping Costs on the Oil Market
Significant changes in the cost of shipping crude oil occur especially when the average shipping cost in the charts for 2026 has been around $7.30 per barrel. These costs have been recorded at a time when the lowest level recorded in this chart was $2.50 per barrel at the beginning of May. Currently, the rates for Very Large Crude Carriers (VLCC) have reached new records, and the increased demand for longer routes, particularly the transportation of oil from the Atlantic region to Asia, has put significant pressure on the tanker market.
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Economic Consequences of the New Changes
The increase in tanker freight means that even if the price of the oil itself remains stable at the source, the cost of oil delivered to Asian refineries will rise. For example, in a 2 million barrel shipment, the increase in shipping costs from about $6.50 to $23.59 means an additional cost of approximately $34.18 million for a similar shipment. This issue could change the economics of oil trade flows, and Asian buyers may weigh shipping costs and risks more heavily in their decision-making compared to the price of crude oil.
According to previous reports, the increase in VLCC shipping rates on routes related to the Middle East and alternative routes has impacted the economics of oil flows to Asia. Given these developments, it seems that changes in shipping costs will significantly affect the decision-making of buyers and distributors in global oil markets.
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