Freight and insurance costs for very large crude carriers (VLCCs) transporting crude oil from the Middle East to East Asia have surged to an average of 30 per cent of the total cost by October 2026, compared with about five per cent in January, the Organisation of the Petroleum Exporting Countries (OPEC) has disclosed.
The development represents a sharp increase in the cost of transporting crude oil, with potential implications for global petroleum prices, energy trade and inflation.
OPEC, in a statement published on its official X handle, said freight and insurance costs traditionally account for approximately three per cent of the total cost of crude oil or petroleum products.
However, the share for VLCC shipments from the Middle East to East Asia had risen to about five per cent by the end of January 2026 before climbing dramatically to an average of 30 per cent by the end of October.
The development highlights the growing cost pressures confronting international oil transportation and the wider petroleum supply chain.
According to OPEC, the exceptionally elevated freight and insurance costs are being transmitted across the entire value chain, increasing the financial burden on both oil-producing and consuming countries.
The organisation warned that the higher costs not only increase the immediate expense of crude oil and petroleum products but also prolong the financial burden across the global energy market.
It added that the development was creating additional inflationary pressures on the global economy.
The surge is particularly significant for countries dependent on imported petroleum products, as higher transportation and insurance expenses can feed into import costs and, ultimately, domestic energy prices.
For oil-producing countries, the rising cost of shipping also presents additional challenges for moving crude to international markets, potentially affecting trade economics and the cost competitiveness of supplies.
OPEC disclosed while drawing attention to a new brochure examining developments in the global oil market and the impact of elevated transportation costs.
The figures underscore how freight and insurance, which ordinarily represent a relatively small proportion of petroleum costs, can become a major component of the final cost when shipping expenses rise sharply.
SOURCE: Independent
