Hamas’ attack on Israel drives an increase in tanker prices

The cost of transporting oil has seen a significant increase on major trade routes since the recent conflict between Hamas and Israel. Freight rates on 16 global trade routes have risen by over 50% on average compared to October 9th, with Mediterranean shipments experiencing the largest increase of doubling in cost. The rally in costs can be traced back to strong exports in the Gulf of Mexico, coupled with concerns of potential disruption if the conflict in the Middle East extends to other producers. Shipping has historically benefitted from geopolitical turmoil, as securing energy supplies becomes a significant concern for traders when conflicts arise.

The tanker industry typically measures rates in worldscale points, which allows owners and leasing companies to negotiate costs per ton on various trade routes. Rates in the Mediterranean reached 219.44 points on Monday, exceeding the previous week’s 107.78 points. The increase in costs highlights the impact of geopolitical events on oil transportation and the importance of stable supply chains in times of global tension.

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