Transportation costs through the Strait of Hormuz are becoming a major concern for the international energy shipping market. TotalEnergies CEO Patrick Pouyanné said the additional cost for a very large crude carrier (VLCC) to transit the Strait of Hormuz and return is now approximately $20 million, equivalent to around $10 per barrel of crude oil. Meanwhile, some Persian Gulf producers are lowering their selling prices to offset the additional transportation costs. TotalEnergies can currently purchase crude in the Persian Gulf market at approximately $50–$60 per barrel, while Brent crude futures have exceeded $90 per barrel. The increase in transportation costs is creating a divide in the energy market: crude shipments are continuing, but refined product shipments face considerably greater pressure, prompting further adjustments to global energy supply chains.

Key Highlights 

• Additional VLCC cost: The additional cost for a VLCC round trip through the Strait of Hormuz is now approximately $20 million. 

• Different market impact: Crude shipments are continuing, while refined product shipments face greater cost pressure. 

• Higher shipping costs: High-risk routes are increasing tanker freight rates, insurance costs, and supply chain risks. 

• Alternative routes: Energy companies are accelerating efforts to find alternative export routes.

$20 Million Increase Changes the Economics of VLCC Voyages

A VLCC can typically carry approximately 2 million barrels of crude oil. Based on the figures provided by Pouyanné, the additional cost for a VLCC to transit the Strait of Hormuz and return is approximately $20 million, equivalent to around $10 per barrel when spread across the cargo.

The current issue in the Strait of Hormuz is therefore not a complete halt to vessel traffic, but a significant change in voyage economics. Shipowners face higher risk premiums, insurance costs, and operational challenges, while energy traders must reassess the balance between purchase prices and transportation costs.

TotalEnergies continues to purchase crude oil from Iraq and Qatar. Pouyanné said these shipments are still moving through the Strait of Hormuz, but finding shipowners willing to accept the associated risks and costs has become essential to keeping these trades moving.

Crude Shipments Continue as Pressure on Refined Products Increases

Crude and refined product shipping are being affected differently. Crude oil is generally carried by VLCCs and other large tankers. Their high cargo capacity means that even an additional cost of approximately $20 million can be spread across a large number of barrels, allowing some crude trades to continue.

Gasoline, diesel, and other refined products are generally transported on smaller tankers with lower cargo capacity. Pouyanné said refined product transportation costs could rise to approximately $50 per barrel. At that level, commercially viable shipments become considerably more difficult, and refined product volumes moving through the Strait of Hormuz remain limited.

A clear divide is emerging between relatively stable crude shipments and tighter refined product supplies. Some crude is still reaching international markets through the Strait of Hormuz, preventing a large-scale disruption to global supply for now. At the same time, higher refined product transportation costs are increasing supply pressure on gasoline, diesel, and other products.

Higher Transportation Costs Reshape Tanker Markets and Supply Chains

The current situation in the Strait of Hormuz is not simply a matter of vessels being unable to transit. Instead, shipping costs are being repriced in response to higher risks.

Shipowners require higher returns to accept voyages involving greater risk, while discounts on Persian Gulf crude are helping traders offset the increase in transportation costs. The additional $20 million has not completely halted crude trade, but the cost is being redistributed among shipowners, traders, and other parts of the supply chain.

For international logistics companies, the effects may extend beyond energy transportation. Changes could also affect vessel deployment, insurance expenses, freight quotations, and the design of customers’ supply chain arrangements. Uncertainty on high-risk routes is prompting companies to reassess their transportation routes and cost structures.

Energy Companies Seek Alternative Export Routes

As costs and uncertainty surrounding the Strait of Hormuz continue to increase, energy companies are looking for more stable export options. Pouyanné said TotalEnergies plans to participate in related pipeline investments and promote an expansion of the United Arab Emirates’ Habshan–Fujairah crude oil pipeline.

The Habshan–Fujairah pipeline connects inland oil fields in the United Arab Emirates with the Port of Fujairah on the Gulf of Oman, allowing some crude exports to bypass the Strait of Hormuz. The pipeline currently has a capacity of approximately 1.8 million barrels per day, and the United Arab Emirates plans to expand its export capacity further.

Changes in transportation costs through the Strait of Hormuz are driving adjustments across global energy supply chains. Route security, transportation costs, insurance rates, and the development of alternative corridors will continue to shape international energy shipping. These changes may also affect ocean freight quotations, risk assessments, and regional cargo flows for international logistics companies.

Sources and Disclaimer 

Sources include publicly available reports and industry information. This article is provided solely for reference by the international logistics, shipping, and supply chain industry. Please refer to the latest announcements from the relevant companies and authorities for current information.