Finance
Global oil and gas shipping costs surge as iran vows to close strait of hormuz
Published by Global Banking & Finance Review®
Posted on March 3, 2026
4 min readLast updated: March 3, 2026
Quick Summary
Supertanker freight rates from the Middle East to China have surged to record highs amid an effective closure of the Strait of Hormuz, while LNG shipping costs have also leapt amid halted production, prompting shipping firms to seek alternatives and reroute.
Global Oil and Gas Shipping Costs Hit Record Highs Amid Strait of Hormuz Crisis
Record Shipping Costs and Market Disruptions in the Middle East
By Florence Tan and Emily Chow
Supertanker Costs Surge Amid Conflict
SINGAPORE, March 3 (Reuters) - Supertanker costs in the Middle East have hit all-time highs, according to shipping data and industry sources on Tuesday, as the U.S.-Iran conflict intensifies with Tehran attacking ships passing through the Strait of Hormuz.
Shipping through the Strait between Iran and Oman, which carries around one-fifth of oil consumed globally as well as large quantities of liquefied natural gas, has ground to a near halt after vessels in the area were hit as Iran retaliated against U.S. and Israeli strikes.
Impact on Oil and Gas Prices
The disruption and fears of prolonged closure have caused oil and European natural gas prices to jump, with Brent crude futures up nearly 10% this week as the conflict triggered multiple oil and gas shutdowns in the Middle East. [NG/EU] [O/R]
VLCC Freight Rates Hit All-Time High
The benchmark freight rate for the very large crude carriers (VLCCs) used to ship 2 million barrels of oil from the Middle East to China, also known as TD3, rose to an all-time high of W419 on Monday on the Worldscale industry measure used to calculate freight rates, or $423,736 per day, LSEG data showed.
The rate had doubled from Friday, extending gains from a six-year high hit last week, after the U.S. and Israel attacked Iran and killed Supreme Leader Ayatollah Khamenei on Saturday.
Iran has responded by attacking Gulf countries, prompting precautionary shutdowns at oil and gas facilities across the Middle East.
Strait of Hormuz Closure
An Iranian Revolutionary Guards senior official said on Monday that the Strait of Hormuz was closed and Iran would fire on any ship trying to pass, Iranian media reported.
LNG Shipping Rates and Operational Impacts
LNG Shipping Rates Jump
LNG SHIPPING RATES JUMP
Daily freight rates for LNG tankers jumped more than 40% on Monday after Qatar halted production.
Atlantic rates rose to $61,500 per day on Monday, up 43%, or $18,750, from Friday, according to Spark Commodities, a pricing assessment agency for LNG shipping. Pacific rates rose to $41,000 per day, up 45%, or $12,750, from Friday.
Analyst Insights on LNG Market
Fraser Carson, principal analyst for global LNG at energy consultancy Wood Mackenzie, said spot daily LNG shipping rates could rise above $100,000 this week on tight supply.
"Vessel availability for the rest of March is considered weak as cargo operators try to work through the backlog created by weather disruptions during February," he said.
"There will be very strong competition for any available vessels."
Until safe passage through the Strait of Hormuz can be assured, shipping will remain idle, Carson said.
Operational Challenges for Shipowners
An oil shipbroker who declined to be named due to company policy said it was very difficult to assess shipping rates in the Gulf as several shipowners had suspended operations indefinitely.
Meanwhile, bunker sales at Fujairah, a major bunkering port in the United Arab Emirates, have slowed as the conflict disrupted fuel supply, spurring a jump in prices and potentially shifting demand to other ports including Singapore.
Industry and Government Responses
Shipping Firms and Contingency Plans
South Korean shipping firm Hyundai Glovis said on Tuesday it was preparing contingency plans including securing alternative routes and ports.
Government Advisories
South Korea's maritime ministry issued a notice to South Korean shippers with vessels sailing in the Middle East, asking them to refrain from business operations in the region, an official told Reuters on Tuesday.
(Reporting by Florence Tan and Emily Chow in Singapore; additional reporting by Heekyong Yang and Heejin Kim in Seoul; Editing by Christian Schmollinger and Kevin Liffey)
Key Takeaways
- •VLCC freight rate (TD3) jumped to W419, or ~$424,000/day—an all‑time high on Worldscale—doubling since Friday amid Iran’s threats and attacks around the Strait of Hormuz (reddit.com).
- •LNG tanker daily rates climbed over 40%, with Atlantic rates hitting ~$61,500/day (up 43%) and Pacific ~$41,000/day (up 45%), driven by QatarEnergy’s shutdown of LNG output (businessinsider.com).
- •Major container lines like Maersk, MSC and CMA CGM suspended operations through the Strait, scrapped war‑risk coverage, and introduced surcharges, dramatically impacting regional shipping dynamics (theguardian.com).
References
Frequently Asked Questions about Global oil and gas shipping costs surge as Iran vows to close Strait of Hormuz
1Why have global oil and gas shipping costs surged?
Costs have surged due to the U.S.-Iran conflict, with Tehran attacking vessels and threatening to close the Strait of Hormuz, causing significant disruptions.
2How has the Strait of Hormuz closure impacted oil and LNG prices?
The closure has caused Brent crude futures to rise nearly 10% and LNG shipping rates to jump over 40%, driven by fears of supply shortages.
3What are the new freight rates for VLCCs and LNG tankers?
VLCC rates hit W419 ($423,736 per day), while LNG tankers saw rates rise to $61,500 per day in the Atlantic and $41,000 in the Pacific.
4Which countries or regions are most affected by the shipping disruptions?
Middle East producers, Asian importers like China and South Korea, and global energy markets are heavily impacted.
5What measures are shipping companies and countries taking?
Companies are preparing contingency plans and seeking alternative routes, while governments like South Korea have advised vessels to avoid the region.
