- Oil markets reached the inflection point analysts had predicted as the Middle East conflict re-escalated with no diplomatic push in sight, pushing crude back above $100 per barrel and lifting U.S. diesel and gasoline prices to new records.
- The daily rate for commissioning a tanker topped $1 million for the first time in history, with tankers picking up crude inside the Persian Gulf fetching as much as $1.035 million per day based on Baltic Exchange data.
- Global observed oil inventories shed 95 million barrels in August, a cumulative loss of 507 million barrels since February equal to around 2.8 million barrels daily, while oil on water declined by 65 million barrels amid attacks on vessels in the Strait of Hormuz.
- Soaring freight, insurance and vessel costs are adding another premium to physical oil prices, with second-hand very large crude carriers fetching some $182 million versus $130 million for a newbuild as buyers look to own vessels instead of renting.
- Shipping risks are spreading beyond the Gulf, with Ukrainian drone attacks raising Black Sea costs at Novorossiysk for a seventh straight week and suspected cyberattacks on tankers traveling from Europe to the United States drawing U.S. federal investigations.
- The Fed raised rates for the first time since 2023, and Hong Kong unveiled its first five-year plan while Chinese oil prices hit record highs.
Quotes
“For a vessel that’s carrying tens of millions of gallons of crude oil, which is highly volatile, there’s always a risk of fire explosion.”
“The price of second-hand oil tankers has surged since the closure of the Strait of Hormuz, and some used vessels are now valued more highly than new ones because it would take two to three years to build a new ship.”
“drop like a rock”