The cost of transportation of oil experiment a marked increase on almost all major trade routes since the attack Hamas to Israel.
According to data provided by the Baltic Exchange Londons, freight rates on 16 global trade routes increased on average more than 50% compared to October 9. The biggest increase was recorded in shipments through the Mediterranean, which doubled.
Halvor Ellefsen, London director of Fearnley’s Shipbrokers UK Ltd., points out that this rebound has its origins in a prolonged period of intense exports in the Gulf of Mexicoto which has been added concern about possible disruptions if a conflict between Israel and Hamas involves other producers from the Middle East.
“Historically, shipping has benefited from geopolitical turbulence“says John Kartsonas, managing partner of Breakwave Advisors LLC, an entity that manages exchange-traded funds related to maritime transport. “The need to guarantee energy supply is the main concern of operators when wars or conflicts break out.”
In the tanker sector, rates are commonly measured in Worldscale points, which make it easier for shipowners and charter companies to negotiate costs in dollars per ton on thousands of individual trade routes. On Monday, these rates reached 219.44 points in the Mediterranean, in contrast to 107.78 points a week ago.
Oil stabilizes after Biden’s words
Also, oil is stabilizing this Tuesday after registering a drop of more than a dollar in the previous dayjust before a trip by US President Joe Biden to the Middle East, which will likely involve balancing support for Israel with the containment of a possible regional escalation in its conflict with Hamas.
Brent crude oil futures are rising 28 cents to $89.93 per barrel, while U.S. West Texas Intermediate (WTI) crude oil is up 12 cents to $86.78 per barrel.
Both contracts had seen an increase last week due to fears that the conflict in the Middle East would escalate, with Brent gaining 7.5%, marking its biggest weekly rise since February. However, on Monday they experienced a setback.
The president of United States, Joe Biden has a high-level visit to Israel scheduled for Wednesdayas the country prepares to intensify its offensive against Hamas militants, triggering a humanitarian crisis in Gaza and raising fears of a broader conflict with Iran.
Source: Ambito
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