OPEC+ ministers cite flow disruption as shipping, insurance costs hit record highs
Ministers meeting in Riyadh reaffirmed June's output decisions without new quota changes, as tanker and insurance costs surge.
Published
Ministers of OPEC and non-OPEC countries in the Declaration of Cooperation, meeting on the sidelines of the 17th IEF ministerial meeting and the 25th WPC Energy Congress in Riyadh on Monday, said disruptions to energy transport have pushed shipping and insurance costs to record highs. A separate account of the meeting, from ChainCatcher, said the group put the increase at more than a third of the value of the commodities being shipped.
The numbers from the market back that up. Lukoil's commercial manager in Bulgaria, Evgeni Simeonov, said insurance for tankers crossing the Black Sea has risen from about $200,000 to $2.5 million per vessel. Baltic Exchange data cited by Reuters showed supertanker rates for a Gulf Coast-to-China VLCC charter at $634,974 a day on Monday, down from a record above $637,000 set on October 8. Sparta Commodities analyst June Goh said freight rates on that route have risen by as much as 300%, with the Fujairah-to-Asia route also climbing sharply, and pointed to the closure of the Strait of Hormuz as a factor reducing the amount of available tanker tonnage.
Ministers reaffirmed the commitments they made on June 7 at the 41st ONOMM meeting to keep the oil market stable, without announcing any new quota changes. They also affirmed the importance of protecting international maritime passages to keep energy flowing.
The statement marks a shift from the rollover tone of recent OPEC+ meetings, which had treated the disruption as manageable while Saudi and Iraqi exports held up despite Houthi strikes. By pointing to shipping and insurance costs rather than quotas, ministers are acknowledging that physical logistics, not production limits, are now the binding constraint on oil flows. If insurers keep pricing in elevated risk, tanker availability and delivered crude costs could keep climbing regardless of what OPEC+ decides on output levels.