Supertankers are racing to the Middle East to capture a share of soaring oil freight rates through the Strait of Hormuz, intensifying a global shortage of vessels and driving freight rates sharply higher.

Despite ongoing attacks on ships, crude oil shipments through the waterway connecting the Persian Gulf to international markets have recovered to near pre-war levels in recent weeks. However, the risks on this route have caused tanker freight rates to surge: the cost of shipping oil from the Persian Gulf to East Asia has reached more than six times pre-conflict levels.

According to shipping data provider Signal Ocean, of the roughly 850 very large crude carriers (VLCCs) worldwide, more than 40% are either currently in the Persian Gulf or just a few days' sail from it. So-called "shuttle trading" has further concentrated vessels in the region: crude is transferred to other ships at emerging transshipment points such as the Gulf of Oman or off India's west coast, because these vessels are unwilling to risk transiting the Strait of Hormuz.

Supertanker Freight Rates Soar

"Recent months have been the best period ever for crude oil tankers," said Georgios Sakellariou, a freight analyst at Signal Ocean. "The main problem is the inefficiency of the ship-to-ship transfer system outside the Strait of Hormuz, which has greatly stretched vessel supply locally and in other regions."

Signal Ocean data shows that the number of empty VLCCs heading to Atlantic ports has halved compared to a month ago. The scarcity of supertankers is also reshaping tanker fleets in other regions, driving more smaller vessels into service that lack the economies of scale of larger ships.

Meanwhile, crude producers outside the Middle East, especially in the Americas, are maintaining high production levels even as crude exports from the Persian Gulf recover. All of this is transmitting through the global oil freight market, adding fuel to already elevated freight rates.

This week, at least one VLCC was reported to potentially command a record-breaking $82 million for a voyage from the U.S. Gulf Coast to Japan, equivalent to more than $40 per barrel. Freight rates on that route have risen more than 50% from three weeks ago.

The Persian Gulf to East Asia voyage takes about three weeks, and supertanker rates assessed on Wednesday reached a record of nearly $1.4 million per day. That figure represents a surge of nearly 540% from pre-war levels, while Brent crude rose only about 40% over the same period.

Fewer Empty Supertankers Sailing to the Atlantic Basin

The scarcity of supertankers and astronomical freight rates have prompted non-Middle East routes to switch to smaller Suezmax and Aframax tankers. So far, most U.S. crude shipments bound for Asia with November loading dates have been conducted using these vessel types, which has in turn pushed up their freight rates.

"VLCCs' smaller sister ship types, Suezmax and Aframax tankers, are showing no signs of slowing down either, so there is really nowhere to hide now," shipbroker Fearnleys wrote in a report on Monday.