Global Crude Shipping Costs Top $20 a Barrel, Up From $3 a Year Earlier
Key Facts
The global average cost of shipping crude rose to more than $20 a barrel in October, from $3 a year earlier, according to Goldman Sachs analysts’ estimates cited by Rigzone. The surge has put transport costs at the forefront of pressures on the oil trade, rising more than sixfold compared with October 2025. The increase began in the very large crude carrier, or VLCC, segment and on Middle Eastern routes before spreading to major crude trade lanes. It was more pronounced on longer voyages, where distance, diversions and transit risks add to costs. The surge comes as vessels transiting the Strait of Hormuz and surrounding passages recorded a high number of reported attacks during October.
A researcher at the Washington Institute counted 28 confirmed and reported attacks on vessels in the Strait of Hormuz and surrounding passages through Oct. 23, according to a Reuters report republished by EnergyNow. These risks provide a security backdrop to rising transport rates as oil shipments continue to pass through the maritime corridor. The Associated Press said tankers transit Hormuz under U.S. military protection, then transfer the oil to other tankers waiting in the Gulf of Oman to carry it to buyers in Asia. This arrangement adds a ship-to-ship transfer stage to the voyage and means the continued flow of crude is distinct from a return to normal shipping patterns. The spread of the surge to major trade lanes also means its impact is no longer confined to shipments leaving the Gulf.
The AP said a transport service known as the “dark shuttle,” overseen by U.S. Central Command, helped restore oil shipments from the Gulf to levels close to those before the war. But the recovery in flows came with higher costs in time and money, as well as risks to seafarers, according to the report. Transfers between tankers remain part of the route for delivering crude to Asian customers as global shipping costs rise. On infrastructure, Aramco President Amin Nasser said the capacity of the East-West pipeline had risen from 2 million barrels a day to 7 million barrels a day. The pipeline provides an oil transport route that bypasses the Strait of Hormuz, while shipping-rate pressures are concentrated in seaborne transport and longer voyages.
Goldman Sachs detailed some drivers of the annual increase in rates, estimating that the inefficient reallocation and rerouting of tankers added $3 a barrel. Disruptions to Iran’s fleet also contributed to higher demand for non-sanctioned tankers, adding $2 a barrel, according to the bank’s estimate cited in an OPIS report published by Dow Jones. The two figures reflect the impact of fewer transport options and vessel rerouting, alongside higher voyage rates. The increase began among VLCCs and on Middle Eastern routes, then widened to major crude trade lanes, particularly longer routes. This gives transport costs greater weight in refinery calculations when comparing distant crude with closer sources.
Goldman Sachs analysts warn that higher shipping rates could reduce refineries’ total demand for crude or lead them to favor geographically closer suppliers. This possibility puts transport costs at the center of purchasing decisions, since a cargo’s appeal can change as the cost added to the crude price to deliver it to a refinery rises. The comparison takes on particular importance as the increase spreads to major trade lanes, while longer voyages remain more exposed to rising rates. In the bank’s forecasts, Brent falls to $90 a barrel by the end of 2026 and averages $80 in 2027. But Goldman Sachs sees upside risks to its forecasts if elevated shipping rates, attacks or infrastructure damage persist.
On the supply side, 7 OPEC+ countries agreed to keep production stable in November, according to the Associated Press. The agency said the group will review oil market conditions at a meeting scheduled for Nov. 1. The meeting comes as crude transport costs remain high and refineries weigh purchasing options among suppliers based on distance and shipping costs. The International Energy Agency also lowered its forecast for global oil demand growth during the year, citing higher fuel prices, limited supply and a deterioration in economic prospects linked to the war in Iran. The upcoming OPEC+ meeting and demand estimates frame the market outlook amid supply constraints and higher costs of delivering crude.