Heavy tanker fares hit Asian refiners' profits

The International Energy Agency (IEA) said in its monthly report that the cost of transporting oil by supertankers has reached an all-time high, putting increasing pressure on the margins of Asian refiners, which are heavily dependent on Middle Eastern crude. The post Heavy tanker fares hit Asian refiners' profits appeared first on Safir Arjan.

The International Energy Agency (IEA) said in its monthly report that the cost of transporting oil by supertankers has reached an all-time high, putting increasing pressure on the margins of Asian refiners, which are heavily dependent on Middle Eastern crude.

According to Ambassador Arjan, the International Energy Agency announced that Asian refineries faced the highest transportation costs. The agency added that freight rates for a very large oil tanker on a route from the Persian Gulf to Asia in the Middle East had risen to about $36 a barrel by early October, more than five times the cost before the war (imposed against) Iran.

The International Energy Agency said refiners could offset some of the decline by buying U.S. crude, but that freight rates have also risen, with costs for the U.S. Gulf Coast route to China exceeding $37 a barrel.

According to the Investing report, the agency announced that rising costs of crude oil delivery caused the profit margins of Asian refiners that process medium sour crude oil to reach negative territory in September.

This situation comes as disruptions in the flow of oil from the Middle East reshape crude oil trade routes and increase transportation costs for buyers farther from producing regions.

For Asian refiners, the combination of high crude prices and record tanker rates means the cost of sourcing alternative sources could remain high even as refiners move away from traditional Middle Eastern cargoes.