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Shipping an oil tanker from the United States to China now costs more than a SpaceX rocket launch

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Global oil shipping costs have skyrocketed amid the volatile security situation in the Gulf, with shipping a tanker from the United States to China costing more than a space rocket launch, Bloomberg reported on Friday.

Brokers at SSY, a large shipbroking house, note that even after adjusting for inflation, current shipping rates are the highest since the first supertankers began operating in the 1960s, surpassing the peaks of the 1980s "Tanker War" between Iran and Iraq in the Gulf.

According to Bloomberg, the drastic spike in expenses is due to a global shortage of tankers, Iranian pressure on the Strait of Hormuz, Houthi attacks in the Gulf and a global shortage of oilers.

Gibson, a shipbroking firm, said that shipping oil from the United States to China costs about $80 million, compared with $74 million for a standard launch of a SpaceX Falcon 9 rocket. At the beginning of the year, this amount was enough to purchase full ownership of a tanker.

The root of the crisis lies in a logistical bottleneck: "There's really not quite enough shipping to go around," said Vitol Group CEO Russell Hardy, one of the world's biggest oil traders. "We've had pretty parabolic pricing."

The uncertainty surrounding the Strait of Hormuz led to tankers looking for business elsewhere. Now, with the Gulf's recovery, their return to the scene takes weeks.

Additionally, the halt of Iranian oil exports to China is forcing Beijing to purchase oil from alternative sources through the regular commercial market, which increases demand for tankers.

Also, damage from Iranian attacks has idled vessels for repairs, while other ships are circumnavigating Africa to evade Houthi attacks, adding thousands of miles to their routes.

Middle Eastern oil producers are being forced to offload and transfer oil between vessels outside the Strait of Hormuz, a process that adds a week to each journey and pushes the global tanker fleet to its limits. Shipping through the strait has recovered to only about 80 percent of prewar levels, further straining capacity.

This week, a U.S. shipping deal was struck at a rate equivalent to $41 per barrel of oil, compared with an average of just $4.50 per barrel on the same route last year. The rate amounts to about 45 percent of the price of a barrel of West Texas Intermediate crude, which traded at around $91.

For tanker owners, a relatively exclusive group of Greek shipping families, Norwegian tycoons and a South Korean shipping magnate, the surge in rates translates into enormous profits. The largest publicly traded companies in the sector have a combined market value of more than $70 billion.

The industry is adapting to the squeeze on capacity. Cargoes from West Africa and South America that would normally be shipped on supertankers are being split between two smaller vessels, freeing up the larger tankers for oil shipments.

This shift has spread the shortage of available vessels to other markets, pushing average daily earnings for these ships to more than $680,000, five times the level at the beginning of October.

Oil producers including Iraq, the United Arab Emirates and Kuwait have also begun buying their own tankers to hedge against supply risks, driving secondhand tanker prices to a record $240 million per vessel.

The crisis is also taking a toll on the refining sector. Although European refiners initially benefited from higher prices amid a diesel shortage, data from RBC Capital Markets shows that refining margins fell by more than half in October as shipping costs surged.

Analysts warn that if freight rates continue to rise, refineries may be forced to cut output, potentially disrupting or even halting global trade flows.