Oil shipping costs soar to highest levels in 11 years

U.S. Secretary of State Mike Pompeo says the U.S. believes that Iran is responsible for attacks that damaged two international oil tankers near the Persian Gulf. Cato Institute’s Christopher Preble gives his take on the damaged oil tankers and the U.S.-Iran tensions.

The blacklisting of a major Chinese operator by the U.S. has sent the cost of transporting oil soaring, according to the Wall Street Journal.

Producers are trying to find ways to get the job done, but it comes at a cost.

According to shipping executives, the U.S. made the decision last month due to allegations that ships were tied to illicit shipments of Iranian crude.

That sidelined 40 vessels operated by a unit of Cosco Shipping Energy Transportation.

Oil traders have been turning to the U.S. for crude shipments, but the longer distance has sent the costs to their highest level since July 2008, according to Baltic Exchange data.

Rates for some very large crude carriers hit more than $120,000 on Thursday, according to traders.

Average earnings for supertankers picking up cargoes from around the world hit $94,124 a day, up from $18,284 on Sept. 25, when Washington blacklisted the Cosco fleet, according to the Journal.