Iran war sends oil tanker rates past $1 million a day: Who is paying the bill and who is making money?

Oil tankers in the Strait of Hormuz are now earning over $1 million daily due to heightened risks from the Iran war, with shipping costs skyrocketing from $208,000. 

Oil tankers crossing the Strait of Hormuz are now earning even more than $1 million a day, as the Iran war has increased the risks and the urgency of moving crude through the key shipping chokepoint.

The cost of hiring a large crude carrier to transport oil from the Persian Gulf to China, which must pass through the Strait of Hormuz, reached $1.035 million per day this week, according to Baltic Exchange data cited by Fortune. In fact, for the first time, the rate has crossed the $1 million mark. Before the war, a similar transportation cost about $208,000 per day, based on the Platts VLCC index.

The price pressure comes as commercial traffic through the Strait of Hormuz has significantly decreased, with the US-Iran war now in its seventh month. Meanwhile, the need to move oil out of the Gulf has increased as restricted supplies have pushed crude prices above $100 a barrel again.

What is causing the surge in prices?

“It’s all about risk,” said Ioannis Papadimitriou, principal freight analyst at Vortexa, told Fortune.

This risk factor has become a major reason for the rise in the shipping bill. On Friday, two tankers were hit by projectiles in the Strait of Hormuz, underscoring that commercial vessels remain the primary targets of attacks.

Insurance costs have also surged. Premiums for vessels have risen to about 10% of the assets aboard, compared with around 0.5% to 1% before the war, Papadimitriou told Fortune. These higher costs are now being passed on to the charterers.

Fewer vessels willing to cross the more disrupted eastern side of the strait have further tightened shipping capacity. At the same time, some maritime companies are expanding their fleets to secure cargo deliveries and strengthen their position in the supply chain.

Who is paying the price and who is making money?

The higher freight bill is ultimately being felt by refiners. They face not only more expensive shipping but also higher crude costs, while alternative routes can take longer. The pressure on refinery margins can then feed through to consumers.

Fortune cited diesel prices crossing $6 for the first time, about 60% higher than before the war in Iran.

Shipping companies, meanwhile, are benefiting from the extraordinary rates. Clarksons, the world's largest shipbroker, reported record earnings in the latest quarter, including a 55% year-on-year increase in operating profit.

The gains have also extended to shipping-focused investors. The Breakwave Tanker Shipping ETF was up more than 3,600% year to date, according to Morningstar data cited by Fortune.

“Every time there’s more geopolitical instability that creates trading inefficiencies, it’s the shipping players that actually benefit,” Papadimitriou said. “And this time is no different.”

About the Author

Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.

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