The World’s Oil Tankers Are Seeking To Flee Hormuz. The Bill Is $2.5 Million Per Ship
The escalating security crisis around two of the world’s most important maritime chokepoints is dramatically increasing the cost of moving oil, forcing tankers to sail thousands of extra miles, adding weeks to delivery times and millions of dollars in extra costs.
According to a Reuters analysis, the combined disruption of the Strait of Hormuz and the Bab el-Mandeb is forcing some shipments to take a circuitous route around Africa’s Cape of Good Hope, extending voyages by nearly a month and increasing transportation costs by roughly $2.5 million per tanker.
The rerouting follows months of mounting instability in the Middle East. The Strait of Hormuz, through which roughly a fifth of the world’s oil consumption typically passes, has faced severe disruption as the war flares up again.
At the same time, attacks and blockade threats by Yemen’s Iran-aligned Houthis have made the Bab el-Mandeb, the southern gateway to the Red Sea, increasingly dangerous for commercial shipping, particularly after the group hit tankers transporting Saudi oil.
Reuters reported that Saudi crude bound for Asia is now being shipped through Egypt‘s Suez Canal before continuing around Africa instead of taking the traditional, shorter routes through Hormuz or the Red Sea.
The detour increases transit time from approximately 19 days to about 48 days, significantly delaying deliveries to the kingdom’s largest customers in Asia. The financial impact is equally significant.
Fuel costs for a single tanker voyage rise from approximately $1.26 million to $2.87 million because of the longer journey, according to Reuters calculations. On top of that, operators must also pay roughly $1 million in Suez Canal transit fees, pushing the additional cost of each voyage to about $2.5 million.
Shipping experts told Reuters that operators are being forced to make increasingly difficult decisions between safety, cost and delivery schedules. The Suez Canal itself presents operational challenges because the largest very large crude carriers (VLCCs) cannot always transit the waterway fully loaded.
Instead, some vessels must sail partially loaded and then transfer additional crude through Egypt’s SUMED pipeline before continuing their journey, adding further complexity and expense. The logistics challenge comes at a time when global oil markets are already under pressure.
Earlier this week, the Houthis announced what they described as a naval blockade targeting Saudi Arabia, raising fears that commercial vessels could face additional attacks while transiting the Bab el-Mandeb.
The strait normally serves as a critical link between the Red Sea and the Gulf of Aden, connecting Europe with energy supplies from the Middle East. Analysts warn that if both the Strait of Hormuz and the Bab el-Mandeb remain effectively inaccessible, shipping alternatives become increasingly limited despite workarounds.
While rerouting around Africa allows crude exports to continue, the longer voyages reduce the availability of tankers, increase freight rates and tie up vessels for weeks longer than normal. Reuters noted that these inefficiencies could tighten global shipping capacity and place upward pressure on transportation costs across the energy sector.
The consequences are already being reflected in oil prices. Brent crude climbed above $100 per barrel this week as traders priced in growing concerns over supply disruptions and rising shipping costs.
