The risks in the Hormuz Strait are increasing, causing futures prices for oil tanker freight to skyrocket.

Shipping intelligence company Kpler said that on Monday, due to increasing uncertainty in the situation in the Strait of Hormuz, the futures prices of very large crude carriers temporarily surged by 85%, before falling back later in the trading session. The spot freight rate from key oil-producing regions in the Middle East to China has increased from $6.55 per barrel to $12 per barrel, reflecting restricted vessel movements and rising risk premiums. Approximately 6% of the global oil tanker fleet by deadweight tonnage is currently stuck in the Gulf region, with 9.6% of VLCC tankers compliant with current environmental regulations. With limited loading of crude oil cargoes, the few contracts that have already been concluded are pushing up freight rates. The market expects that disruptions in Middle Eastern exports will increase demand for oil tankers in the Atlantic Basin, the US Gulf Coast, and the Indian region.