MediumI Geo-Economics & Chokepoints20 October 2026, Tuesday · 02:52 TRT (UTC+3)
Tanker scarcity lifts crude freight to 40 dollars a barrel
Figures relayed on 20 October put freight at 40 dollars a barrel, so moving a 2 million barrel cargo from the United States to China now costs 80 million dollars.
October's squeeze is not in the cargo but in the ships. On the picture relayed by UTIKAD chairman Bilgehan Engin, freight has climbed to as much as 40 dollars a barrel, and carrying 2 million barrels from the United States to China costs 80 million dollars. Security risks around Hormuz, sanctions and lengthening routes are making tankers hard to find.
A 7 October calculation drawn from Baltic Exchange data put the cost of chartering a VLCC to move US crude to Asia at 77 million dollars. The 2025 average for the same voyage was 9.2 million dollars. On a 2 million barrel cargo that works out at roughly 38.5 dollars a barrel of additional transport cost.
The structural constraint is not the number of vessels but cycle time. Greater distances, port waits and ship-to-ship transfers stretch voyages, so usable loading capacity falls even with an unchanged fleet. For Türkiye the effect lands in delivered cost through freight and war-risk insurance. Engin argues that cost has to be trimmed through multi-year contracts.
Talay assessment
Bottom line
Freight at 40 dollars a barrel shows the cost shock now forming in transport rather than in the crude quotation. Delivered cost for a Turkish refiner is rising independently of Brent. If safe-passage conditions around Hormuz improve, waiting times fall and freight could ease in part, but full normalisation is unlikely before fleet cycle times recover.
Likely effects
- Turkish refining marginsNegativeWeeks
Freight of 40 dollars a barrel raises the delivered cost of crude feedstock and makes distant-origin cargoes uneconomic.
- Fuel pricesNegative1–6 months
Should freight and war-risk insurance stay embedded, pump-price relief coming from Brent is erased by transport cost.
- Tanker ownersPositiveWeeks
A voyage that fetched 9.2 million dollars in 2025 now earns 77 million, generating extraordinary cash for the existing fleet.
- Sourcing strategyUncertain1–6 months
Nearby supply and multi-year transport contracts turn into a cost advantage for Turkish buyers.
Possibilities, ranked
- 1High freight persists50%
The Hormuz risk premium stays, voyage times remain stretched and freight holds in record territory.
Watch: Baltic Exchange VLCC quotations and the daily Hormuz transit count
- 2Partial easing35%
Safe-passage conditions improve, port waits contract and freight retreats in stages.
Watch: Daily tanker transits through Hormuz returning to normal
- 3Fresh spike15%
Another incident in the strait or a new round of sanctions pushes freight higher once more.
Watch: A fresh announcement of increases in war-risk insurance premiums
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Freight per barrel▲ $40
- US-Asia VLCC voyage▲ $77m
- 2025 voyage average▼ $9.2m
- 2 million barrel cargo▲ $80m