The cost of moving oil has reached an eleven-year high. Recently, the United States blacklisted a major Chinese company in this industry. As a result, oil transportation prices increased rapidly. Major oil-producing countries are desperately finding a way out.
Last month Washington blacklisted the Chinese firm due to illegal shipment of Iranian crude oil. As a result, the company sidelined 40 vessels which were operated regularly by Cosco Shipping Energy Transportation.
With limited supply the demand is increasing day by day, as a result, the cost of transportation is also increasing. The cost of a large crude oil carrier hit more than 1,20,000 USD by Thursday.
The average rate of a large supertanker reached 94,124 USD in a day. Before the ban on the Cosco fleet, the price was around 75,000 USD.
The recent attack on Iranian tankers near Saudi Arabia will serve no good for the industry. The crude oil price has already increased by 2.07% per barrel. Increased crude oil prices with an extra burden of transportation will definitely have an impact on the global level.
The result of ongoing trade talks between the United States and China might bring some relief for the industry.