Shipping brokerage BRS analysts report that elevated war risk insurance premiums for vessels transiting the Strait of Hormuz are a more significant deterrent for oil product tankers than for crude oil carriers. The primary reason for this disparity is the relatively modest increase in freight rates for refined petroleum products, which does not adequately offset the additional insurance expenses. In contrast, crude oil carriers have seen freight rates rise sufficiently to absorb these extra costs.
For freight forwarders and operations managers, this situation implies potentially higher overall shipping costs for refined petroleum products originating from or destined for the Persian Gulf region. While crude oil transport might see these costs passed through with less friction, the tighter margins in product tanker operations mean forwarders could face more volatile pricing or reduced capacity as some carriers might opt to avoid the region if premiums remain high and freight rates do not adjust accordingly. This could lead to longer transit times if alternative routes are sought, or increased surcharges on existing routes.
