Written by: Basant El-Farmawi
Global oil prices have recorded high levels, affected by the increase in maritime shipping costs, as many consumers overlook the hidden costs added to every paper and contract for crude transport. Brent crude prices reached approximately $108.6 per barrel, while US West Texas Intermediate (WTI) hovered around $100.9 per barrel.
Logistical Crisis and Record Shipping Costs
Tensions and disturbances in some maritime regions have led carriers to prefer alternative, longer navigation routes, causing an unprecedented rise in shipping rates for giant oil tankers. The cost of chartering a tanker to transport about two million barrels of oil from Mexico to Japan reached record levels of nearly $81 million, equivalent to about $40.50 of additional cost per barrel just for maritime shipping expenses.
Market Contradictions and Their Impact on the Consumer
High transportation costs have created a contradiction in global markets, represented by a surplus of oil stocks in the US against an urgent need for raw materials in other regions, as refineries were unable to absorb the surplus quantities due to the exorbitant cost of transport. Although the shipping item does not appear directly on local station bills for consumers, these hidden costs are reflected directly on the final prices of fuels and inflation rates.
