Oil Shipping Costs Jump Sevenfold Due to Middle East War

Goldman Sachs Group Inc. reports that global shipping costs for crude oil have increased approximately sevenfold over the past year. The average rate for hauling oil has risen to over $20 per barrel, a significant jump from the $3 per barrel average recorded one year ago.

Analysts attribute this surge to the ongoing war in the Middle East. Specific cost drivers include a $7 war-risk premium applied to the Strait of Hormuz, $4 in increased fuel costs, and $4 resulting from the operational impact of ship-to-ship transfers. Financial analysts expect these elevated rates to persist.