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Oil market tightness persists as freight and diesel costs surge
Freight now accounts for at least 25% of crude delivered to Asia, up sharply from 5% to 6% in 2025, pressuring oil-company margins.
Yahoo Finance reports that Saudi pipeline flows have resumed, but the restart has not eased global oil market tightness, with higher freight and diesel prices signaling continued strain in oil shipping capacity.
The outlet points to persistent long-haul tanker shortages as stranded Gulf vessels contribute to a worldwide lack of VLCC ships. Daily earnings on a Gulf-to-China voyage reportedly reached $1.2 million this week, while French oil major TotalEnergies fixed the Kuwait Prosperity tanker at a rate around $75 million, with offers later rising toward roughly $100 million.
As VLCC rates reach unprecedented levels, Asian refiners are shifting toward smaller parcels for long-distance voyages, including switching from VLCCs to Suezmax cargoes for routes such as Chinese refiners importing Brazilian crude. Bloomberg is cited as saying freight makes up at least 25% of the total cost of crude delivered to Asia, compared with 5% to 6% in 2025, which is expected to reduce profitability for oil companies.
The report also describes related activity across energy infrastructure and shipping, including Apollo Global Management evaluating a full or partial sale of Energos Infrastructure, Trafigura launching a dedicated shipping unit with a fleet of 14 VLCCs, and TotalEnergies signing a $1.8 billion capital injection deal with BlackRock's Global Infrastructure Partners tied to oil and gas projects in Africa. It further notes Osaka Gas has agreed to buy a 5% stake in BP's Browse gas project off western Australia, and ONGC has announced a gas discovery in India's deepwater Mahanadi Basin.
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