Crude Flows Recover, Refined Freight Costs Spike
Refined-product shippers moving Gulf cargo to Asia face freight rates near $40 per barrel, far above the historical average.
Updated on Nov. 1, 2026 in Oil and Gas
Live Poll
Do you expect the cost of gas and everyday goods to rise in the coming months?
An Iranian oil tanker carrying two million barrels of oil reached China after three and a half months at sea, having departed the Strait of Hormuz during the Memorandum of Understanding between Iran and the U.S. Crude exports from the Middle East are now nearing 90% of pre-war levels, while refined product flows remain at 60% of previous volumes.
Why it matters
The recovery is uneven across product types and shipping sizes: crude carriers are moving again, but smaller tankers carrying refined goods face higher risks and fewer escorts. For operators in oil and gas logistics, trading, and refined-product supply, the gap between crude and refined flows is the practical signal to watch.
Crude exports from the Middle East are nearing 90% of pre-war levels, while refined products such as gasoline and diesel remain at 60% of previous volumes. Gulf-to-Asia transport costs have spiked to $40 per barrel against a historical average of $4 per barrel, and the U.S. security bubble around Hormuz costs roughly $2 billion to $3 billion to maintain.
The players
Iran
Iran is a major oil-producing state whose tankers carry crude through the Strait of Hormuz to Asian buyers.
United States
The U.S. operates the security bubble around the Strait of Hormuz with jets and warships, a costly commitment to protecting Gulf shipping.
China
China is the destination market for the Iranian tanker and a large buyer of Middle East crude.
The details
The U.S. maintains a security bubble around the Strait of Hormuz using jets and warships to protect Gulf shipping, and its doctrine favors very large crude carriers to maximize cargo efficiency per voyage. Smaller tankers carrying refined goods face higher risks and fewer escorts under this arrangement, which helps explain why refined-product flows lag crude. The tanker that reached China had left the strait during the Memorandum of Understanding, and its three-and-a-half-month voyage shows how long transit now takes.
Timeline
During the Memorandum of Understanding between Iran and the U.S., an Iranian tanker departed the Strait of Hormuz.
Three and a half months later, the tanker reached China.
Since the Memorandum of Understanding was signed, oil export levels have reached pre-war levels.
Market Landscape
Flows are recovering under the Memorandum of Understanding, but the recovery is concentrated in large crude carriers rather than refined-product shipping. The $40 per barrel Gulf-to-Asia rate against a $4 historical average shows how far the shipping market remains from normal conditions.
Operators moving refined products should expect higher Gulf-to-Asia freight costs and plan for refined volumes that remain at 60% of previous levels. Companies with exposure to smaller tankers should review their risk and escort arrangements with qualified counsel and shipping advisors.
The takeaway
Crude is moving again, but refined-product shipping is lagging, so operators should track the gap between crude and product flows over the coming quarters. Watch freight rates on Gulf-to-Asia routes as the clearest signal of whether transport costs are normalizing.
Further reading
For broader context on how shipping disruptions shape supply, see our Oil and Gas coverage.
Source note: This article includes information reported by Al Bawaba.
Live Poll
Do you expect the cost of gas and everyday goods to rise in the coming months?
