VLCC Rates Hit $1M as Iran Conflict Disrupts Hormuz
Tanker rates exceed one million dollars daily while Kansas crude sits at $90.50 per barrel.
Key points
- VLCC charter rates exceed $1M daily, up 12x from three months ago due to Hormuz congestion.
- Kansas crude closed at $90.50/bbl, while national diesel hit $6.52/gallon.
- US crude imports topped 7.1M barrels/day, the highest weekly tally in five years.
Daily charter rates for Very Large Crude Carriers exceeded one million dollars on key routes. This figure is more than twelve times the level recorded three months ago.
Drone attacks on Saudi Arabia forced a surge of traffic through the Strait of Hormuz. The resulting bottleneck has driven global shipping costs to record highs.
Regional fuel costs climb sharply
National diesel prices rose to $6.52 per gallon on Monday. This represents an increase of nearly thirty cents from the previous week.
Kansas gasoline averages $4.17 per gallon, which is thirty cents below the national average. The national average stood at $4.47 per gallon during the same period.
Crude benchmarks face volatility
New York and London crude benchmarks dropped nearly five percent on Monday. Dated Brent crude traded above $116 while next-month contracts stayed below $100.
Kansas crude prices closed Friday at $90.50 per barrel at CHS. This price is ten dollars higher than the level at the start of the month.
State production activity remains stable
Kansas produced just over two million barrels in May, averaging 65,237 daily barrels. Ellis County led production with 5,369 barrels per day, according to the Great Bend Post.
The state rig count held steady at twenty rigs, split between eastern and western regions. This total is thirty-three percent lower than the count from one year ago.
