At four in the afternoon in London on Tuesday, September 15, 2026, the Baltic Exchange published its daily assessment for one voyage: a 270,000 tonne crude tanker loading at Ras Tanura in Saudi Arabia and discharging at Ningbo in China.
The number was $1,099,000 a day.
At the start of this month the same voyage was assessed at about $700,000 a day, and on Monday, September 14, it crossed a million dollars for the first time in the life of the benchmark, as Seatrade Maritime reported from the Baltic's own numbers.
Four days later, on Saturday morning, the commander of US Central Command released a video saying the Strait of Hormuz is busier than it has been in six months.
Both of those statements describe the same stretch of water in the same week.
The war premium has moved off the barrel and onto the ship that carries it, and the oil price on your screen no longer shows you where it went.
What the Admiral Said
Adm. Brad Cooper runs Central Command, and on Saturday, September 19, the command put out his video update on the strait. Anadolu Agency carried the numbers:
"CENTCOM forces have supported more than 1 billion barrels of crude oil leaving the Gulf."
He said American forces have assisted more than 2,000 commercial vessel transits, that the main lanes have been cleared of mines, and that Iran has exported "zero barrels" under what he called an ironclad blockade. He said the volume of crude, cargo and liquefied natural gas that moved through the strait in the past two weeks was higher than at any point in the previous six months, and that he is working with the six Gulf Cooperation Council states, with insurers and with shipping companies to lift it further. Arab News reported the same briefing and pinned down his timeframe for the billion barrels: the last couple of months.
So let's do the division he left out.
A billion barrels over two months is about 16 million barrels a day. The EIA's own measurement of that waterway, published on June 16, 2025, puts the 2024 average at 20 million barrels a day of crude, condensate and products, roughly a fifth of everything the world burns. If his couple of months runs nearer three, the escorted rate is closer to 11 million a day.
In other words, the number the Navy is proud of describes a strait running at somewhere between half and four fifths of normal, in the seventh month of a war that began on February 28. We set out what to watch in that war before it reached the tankers, in Trump's "Economic D-Day" on Iran: What Investors Should Watch.
What the Tanker Trackers Counted
There is a second count of the same week, and it comes from the companies that follow ships rather than the command that escorts them.
The Associated Press reported on September 18 that 26 to 35 vessels a day transited the strait this week, according to Dimitris Ampatzidis of the tanker tracking firm Kpler, down from a daily average of 35 to 40 over the prior eight weeks.
One count is tonnage escorted and the other is hulls counted, so both can be true if the ships going through are larger and fuller. What neither of them describes is a return to normal.
The same report carries the reason masters are being selective. Iran said it struck the Togo-flagged tanker Trend on Thursday night over what it called an illegal attempt to pass the strait, the Revolutionary Guard's navy warned that vessels transiting without its authorisation face destruction, and the United Kingdom Maritime Trade Operations said another tanker was hit on Wednesday by an unknown projectile, with the crew reported safe.
A London insurance broker gave the AP the sentence that sets the price of a voyage:
"Traffic remains severely impaired and increasingly selective."
Why would we read a broker's line before an admiral's video? Because the broker's line gets priced every morning in the freight market, and the video does not.
The Door That Shut on September 11
Something else happened this month that explains why the freight market broke when it did.
On Friday, September 11, Saudi Arabia shut its East-West pipeline after a series of drone attacks, its energy ministry said.
That pipeline is the bypass. It runs across the Arabian Peninsula to the port of Yanbu on the Red Sea, and for six months it had been carrying around 4 million barrels a day, about 4% of global supply, out of the kingdom without going anywhere near Hormuz, Reuters reported on September 13.
With the line down, Yanbu had stocks to keep loading for five to seven days, three industry sources told Reuters, while estimates of the repair ran as long as five or six weeks.
Those five to seven days ran out this weekend.
Every Saudi barrel that still wants a buyer therefore has to leave through the door the US Navy is escorting, which is the same door Iran is shooting at.
The Toll on a Barrel
Freight is normally the dullest line in an oil trade. The owner takes a few tens of cents a barrel, the buyer argues about the crude price, and nobody reads the charter.
Read it now.
A broker note carried by Hellenic Shipping News on September 16 put freight from the Middle East Gulf to China at $24 a barrel, and $12 a barrel for cargoes loading in the Gulf of Oman, where a ship stays outside the strait itself.
At $24, freight is 25% of the fob price of the crude, against 17% at the start of the conflict and around 5% before the war.
Baltic TD3C, Ras Tanura to Ningbo, US$ thousand a day
Source: Baltic Exchange assessments reported by Seatrade Maritime, September 16, 2026
| Label | Value |
|---|---|
| Sep 1 | 700 |
| Sep 11 | 800 |
| Sep 14 | 1034 |
| Sep 15 | 1099 |
The Baltic Exchange builds that assessment from the confidential reports of vetted brokers working the physical market, which is why a fixture shows up in it within a day. Total's Singapore desk took the 2016-built Kuwait Prosperity for a September 22 cargo out of the Gulf at Worldscale 1350, and that one charter prints above a million dollars a day on its own.
The Atlantic is paying too. Hiring a very large crude carrier to move 2 million barrels from the US Gulf Coast to China cost about $44.8 million on Tuesday, September 15, Bloomberg reported from Baltic Exchange data, up from roughly $39 million a day earlier and more than double the $17.8 million that same voyage cost before the war.
Now put the crude screen next to it. The EIA's Daily Prices page, published on September 18, carried Thursday's closes: Brent at $121.18 a barrel, down 5.2% on the day, with West Texas Intermediate at $103.21.
Crude fell 5.2% in a single session while the cost of moving it set the highest print the benchmark has ever carried, so a buyer in Ningbo, who pays for both, saved almost nothing.
Who Pays It
Asian refiners pay first, and they pay by charging more for fuel, which is precisely what that broker note tells its clients to expect: product cracks will have to widen to absorb the delivered cost of crude.
You can watch the same thing on the American Gulf Coast. The 3:2:1 crack spread, the rough margin on turning three barrels of crude into two of gasoline and one of distillate, was $65.59 a barrel on September 17 and rose 8.2% that day, on the same EIA page that showed Brent down 5.2%.
You pay the other end of that margin, and on the same EIA page the AAA averages for September 17 were $4.47 for a gallon of gasoline and $6.45 for a gallon of diesel.
Distillate is the half of the barrel that arrives in your life first, through the truck, the tractor and the furnace, and the freight bill now sits on top of it.
That is the inflation the Federal Reserve raised rates into on September 16, and we went through the household side of that decision in The Last Time Wealth Peaked Like This.
Let's put the whole picture in one place:
- The Baltic's assessment for a very large crude carrier from Ras Tanura to Ningbo went from about $700,000 a day at the start of September to $1,099,000 on September 15, the first seven-figure reading in the benchmark's history.
- Saudi Arabia shut the East-West pipeline on September 11, putting roughly 4 million barrels a day, about 4% of world supply, back on the Hormuz route.
- CENTCOM says it has supported more than a billion barrels out of the Gulf in a couple of months and assisted over 2,000 transits, a rate of 11 to 16 million barrels a day against 20 million before the war.
- Kpler counted 26 to 35 transits a day this week, below the 35 to 40 of the previous eight weeks.
- Iran says it struck the tanker Trend on the night of September 17, and has told masters that transits without its permission face destruction.
- Freight is 25% of the fob crude price out of the Middle East Gulf, against about 5% before the war.
- Brent closed at $121.18 on September 17, down 5.2% in a session, in the same week the freight to move it hit a record.
What We Would Do
We would own the hulls, in a size we can afford to be wrong in.
The listed owners have already earned part of this tape. Between August 31 and September 18, Frontline (NYSE: FRO) went from $43.78 to $51.42, a gain of 17.4%, DHT Holdings (NYSE: DHT) from $19.60 to $23.27, up 18.7%, International Seaways (NYSE: INSW) from $98.64 to $111.15, up 12.7%, and Teekay Tankers (NYSE: TNK) from $89.64 to $100.92, up 12.6%.
Set those gains beside the rate itself, which rose by more than half in the first two weeks of September, and you can read what the equity market is doing: it will pay for the cash flow, and it will not capitalise it.
Our guess is that the market has that roughly right, because the brokers reporting these rates expect them to level off, and say the next move is more likely to come through fewer loadings than through higher rates.
A shipping trade in a war has a short fuse. The rate that is minting this cash can be halved by a ceasefire, by the East-West pipeline restarting, or by Cooper's corridor working so well that underwriters cut their premium, which is the outcome he says he is working towards with insurers. The same fuse sits under the rates and gold trade we wrote about in August in Gold Price Swings as Rates and Iran Tensions Collide.
Any pullback in the rate that does not come with one of those three is the one we would be buying.
Three dates to write down:
- Every weekday at 1600 in London: the Baltic's TD3C assessment. It is the daily read on whether the corridor is working, and it is what the owners' quarterly earnings are made of.
- September 22: the Kuwait Prosperity loads its Gulf cargo at Worldscale 1350. Watch whether the fixtures after it clear above or below that mark.
- The East-West pipeline: Reuters counted five to seven days of Yanbu stocks on September 13 and repair estimates of up to six weeks. A restart takes 4 million barrels a day back off the strait, and freight will move before any announcement does.
A strait nobody can close is not the same thing as a strait anybody can afford.
Right now, the difference is a million dollars a day.
Seek the truth and be prepared,
Equedia
Sources
- Seatrade Maritime, VLCC rates smash through million dollar barrier
- Anadolu Agency, US military says over 1B barrels of oil shipped through Strait of Hormuz
- Arab News, US military: Strait of Hormuz shipping traffic at 6-month high
- U.S. Energy Information Administration, Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint
- Associated Press, Iran claims it struck an oil tanker in the Strait of Hormuz
- CNBC, Saudi Arabia shut down East-West crude oil pipeline after multiple attacks
- Reuters, Saudi pipeline outage threatens loss of 4% of global oil supply
- Hellenic Shipping News, Crude tanker rates hit new highs as Hormuz risk escalates
- Baltic Exchange, Tanker market information
- Bloomberg, Iran war pushes cost of shipping US Gulf Coast oil to Asia to record
- U.S. Energy Information Administration, Daily Prices
- The Equedia Letter, Trump's "Economic D-Day" on Iran: What Investors Should Watch
- The Equedia Letter, The Last Time Wealth Peaked Like This
- The Equedia Letter, Gold Price Swings as Rates and Iran Tensions Collide
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