Surging Middle East Shipping Costs Widen Global Oil Price Gaps, Goldman Says

By Giulia Petroni

Oil supply from the Middle East has remained resilient despite escalating tanker attacks, but surging shipping and insurance costs are driving a sharp divergence in crude prices across regions.

The average global crude freight rate has climbed to $30 a barrel, up from $4 a year ago, Goldman Sachs estimates. Rates on Middle Eastern routes have risen to $35 a barrel.

"While increased redirection amid Red Sea attacks and the blockade of the Iranian fleet contribute to the freight market squeeze, we think ship-to-ship transfers are the main driver of the freight rates rally," analysts at the U.S. bank said.

The increase in freight and insurance costs associated with crossing the Strait of Hormuz has also widened price differences between crude grades, depending on where they are loaded. The premium for Murban crude, loaded at Fujairah outside the strait, over Basrah crude, loaded inside the Persian Gulf, has risen to $43 a barrel from just $2 in February, according to Goldman.

Higher transportation costs are prompting refiners to favor crude grades sourced closer to their destinations, reducing the need to pay elevated rates for long-haul shipments. This shift is widening regional price differentials, particularly in physical crude markets.

Dated Brent, a benchmark for physical crude cargoes, is now trading at a $40-a-barrel premium to comparable West Texas Intermediate crude and a $24-a-barrel premium to Dubai crude, according to Goldman.

Goldman Sachs said prices for Dubai crude relative to its benchmark have eased from early September highs as increased exports have boosted supply, while soaring shipping costs have made deliveries more expensive, making them less attractive for buyers.

By contrast, the Brent crude basis has climbed to 27%, reflecting stronger demand for supplies more readily accessible to European and Mediterranean refiners as buyers seek to limit transportation costs and exposure to shipping disruptions.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

October 13, 2026 04:26 ET (08:26 GMT)