Oil shipping costs surge sevenfold to over $20 a barrel amid war: Goldman Sachs

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Higher war-risk premiums, fuel expenses and ship-to-ship transfers are driving freight rates up, potentially reshaping crude trade and refinery sourcing.

By Bloomberg

Updated - October 21, 2026 at 10:18 AM.

FILE PHOTO: Oil tanker shipping costs have surged amid the Middle East conflict, with ship-to-ship transfers tying up vessels in the Persian Gulf and Gulf of Oman. | Photo Credit: KYODO

Global shipping costs for oil have surged about sevenfold over the past year because of the war in the Middle East and they are likely to remain elevated, according to Goldman Sachs Group Inc.

The average rate for hauling crude has surged above $20 a barrel, up from $3 a year ago, analysts including Yulia Zhestkova Grigsby wrote in a note. The rise includes an extra $7 for the war-risk premium in the Strait of Hormuz, and $4 each for higher fuel costs and the impact of ship—to-ship transfers.

Higher freight rates pose upside risk to oil prices

“Higher freight rates for longer pose some upside risk to our Brent forecast, along with the risks of more intense shipping attacks, damage to oil infrastructure, and a stickier geopolitical risk premium,” they said. At present, the bank’s baseline forecast for Brent is a drop to $90 a barrel by year-end.

War disrupts global shipping routes

The US-Iran war upended shipping markets worldwide, following attacks on vessels in and around the Persian Gulf. The conflict initially prompted a collapse in the volumes being shipped through the Strait of Hormuz, although they have since recovered, with vessels shuttling cargoes through the contested waterway for transfer onto larger tankers, which deliver to processors.

High transport costs could reshape crude trade

The high crude freight rates may “reduce refiners’ overall demand for crude as the effective price of delivered oil rises,” the analysts said. “Refiners may also seek more closely located suppliers, changing established trading patterns.”

For now, the drivers “supporting crude freight rates to persist largely as long as the Middle Eastern conflict remains in its current state,” they said.

Nearly a sixth of the tankers currently in the Persian Gulf and the Gulf of Oman are tied up in ship-to-ship transfers each day, the analysts said.

More stories like this are available on bloomberg.com

Published on October 21, 2026

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