Two Kuwaiti oil analysts confirmed on Sunday that crude oil shipping rates have risen sharply in recent days due to escalating Middle East tensions amid the Iran-Israel conflict, raising concerns over potential disruptions to vital shipping lanes, particularly the Strait of Hormuz.

Key Findings:

1. Price Surges:

   • VLCC and medium tanker charter rates up 15-25% since pre-crisis levels

   • Regional war risk insurance premiums spiked over 30% in some cases

2. Root Causes:

   • Geopolitical risks in Arabian Gulf shipping routes

   • Critical threat to Strait of Hormuz (handling 20% of global oil)

3. Economic Impacts:
   → Global fuel price increases
   → Supply chain disruptions elevating production costs
   → Potential consumer price inflation
   → Major importers (India, China) facing energy bill shocks

Expert Analysis:

Jamal Al-Gharballi, Energy Consultant:

• Warns of possible export reductions if Hormuz closes

• Alternative routes may include:
  ✓ Saudi Petroline to Red Sea
  ✓ Fujairah port (UAE)
  ✓ Northern Iraq pipelines

• Predicts central banks may raise interest rates to counter inflation

Dr. Abdul-Samea Behbehani, Oil Shipping Expert:

• Notes May 2024 VLCC rates dropped from $40k to $26k/day due to:
  ✓ Tanker oversupply
  ✓ Weak Asian demand

• Confirms:
  ✓ Current transport costs = 1-3% of barrel value (stable)
  ✓ Insurance remains at $0.05-$0.10/barrel even during crises
  ✓ Long-term tanker contracts buffer spot market volatility

Market Stabilizers:

• Strait of Hormuz remains fully operational

• Existing oil flow stability minimizes price shocks

Recommended Actions for Stakeholders:

1. Monitor war risk surcharge updates

2. Review force majeure clauses

3. Diversify transport routes

Projections:

• +30% shipping cost hike possible if tensions escalate

• Potential oil price records if Hormuz disrupted