The global oil market is facing renewed supply pressure as the cost of transporting crude oil has risen by about seven times over the past year.
The development is adding strain to petroleum markets even as Middle Eastern producers work to restore export volumes disrupted by the conflict involving Iran.
Goldman Sachs said in an October 20 research note that average international crude freight costs have risen above $20 per barrel, compared with about $3 a year earlier.
On some Middle Eastern routes, transportation costs have exceeded $35 per barrel.
The investment bank warned that if shipping costs remain elevated, Brent crude could trade above its baseline forecast of $90 per barrel by the end of 2026 and average $80 in 2027.
The increase reflects changes in crude transportation following attacks on commercial vessels and disruptions around the Strait of Hormuz.
According to Goldman Sachs, higher war-risk insurance premiums, increased vessel fuel costs and ship-to-ship transfers account for much of the rise in global freight expenses.
While these arrangements have helped restore crude shipments from the Persian Gulf, they require additional vessels, handling operations and longer transportation time.
The bank estimated that nearly one-sixth of tankers operating in the Persian Gulf and Gulf of Oman are involved in ship-to-ship transfers each day.
The resulting reduction in available tanker capacity is also affecting markets beyond the Middle East.
Higher tanker demand and longer voyages can raise freight costs on other international routes, affecting the competitiveness of crude supplies from different producing regions.
For refiners, transportation is a major part of the total cost of acquiring crude.
Even when benchmark oil prices fall, high freight rates may prevent refiners from enjoying a similar reduction in the cost of delivered feedstock.
The financial impact depends on a refinery’s location, crude quality requirements, transport arrangements and its ability to pass higher costs on to consumers through refined product prices.
Persistent shipping constraints could also push refiners to buy crude from suppliers located closer to their facilities, potentially reshaping established trade flows and regional price differences.
For U.S. producers, such shifts could affect export demand and the prices they receive, especially for companies supplying international markets.
Domestic refiners may experience different outcomes depending on their access to inland crude, Gulf Coast import facilities and international product markets.
The effects also extend to diesel and marine fuel supply.
Goldman Sachs said a slower recovery in Middle Eastern refined product exports could keep bunker fuel supplies tight, increasing costs for commercial shipping operators.
For energy investors, the difference between a recovery in oil production and a return to normal transportation conditions is becoming increasingly important.
Additional crude production may improve global supply balances, but it may not immediately reduce the overall cost of delivering petroleum to end users.
The bank’s outlook assumes continued recovery in Gulf production and exports, but notes that alternative loading arrangements may remain necessary until navigation through the Strait of Hormuz becomes more reliable.
Future Brent prices will therefore depend partly on freight rates, vessel availability, insurance costs and the restoration of normal shipping routes.
The broader implication is that maritime security and transportation infrastructure have become important factors in crude pricing, refinery profitability and global energy affordability.