US-Iran war six months on: tanker rates and fuel prices surge amid disruptions

International Shipping News | 01/09/2026

Six months into the Middle East conflict, disruption around the Strait of Hormuz is pushing tanker freight rates to record highs and tightening refined products markets, while Qatar faces a prolonged loss of LNG export capacity. Because the strait normally carries a fifth of global seaborne oil and LNG flows, the sustained drop in crossings has rippled beyond the Gulf trade itself and into freight, refining margins and product availability in multiple regions.

S&P Global Commodities at Sea data show ship crossings through the key waterway, which normally handles 20% of global seaborne oil and LNG flows, have fallen by more than 80% since the US-Iran war broke out on Feb. 28.

Energy producers in the Persian Gulf have faced lower vessel viability for their seaborne trade and have been developing longer alternative routes to maintain exports, which has increased tonnage requirements.

“The restricted Hormuz trading and different owners’ risk levels have resulted in poorer fleet employment efficiency,” CAS analysts said in an Aug. 25 report.

Earnings for clean and dirty tankers have risen to historically high levels during the conflict, reflecting both the rerouting of cargoes and the reduced pool of vessels willing or able to trade the area. The benchmark Middle East Gulf-Japan Long Range 2 tanker route hit an all-time high of $107.72/mt on Aug. 27 and remained at that level on Aug. 28, according to Platts data, part of S&P Global Energy.

A refined products shortfall in Southeast Asia has added to the pressure, with August distillate imports into the region running about 20% below prewar levels. That has forced buyers to compete more aggressively for alternative barrels and has extended charters for vessels still able to access the Middle East Gulf and regional export programs, CAS analysts said.

Products tighten, crude supported

Europe is also feeling the strain, showing how the disruption has moved through linked fuel markets rather than remaining confined to tanker routes. Platts assessed ultra-low sulfur diesel cargoes on a CIF Mediterranean basis at $1,295.75/mt on Aug. 26, up from $762.75/mt on Feb. 27, before the war began, and above a five-year average of $853/mt.

European diesel refining margins have climbed to their highest levels in at least 15 years as the Middle East conflict, Russian export restrictions and approaching US refinery maintenance tighten an already strained global market, analysts and traders said.

Among other middle distillates, Platts assessed Northwest European jet fuel cargoes on a CIF basis at $1,271.25/mt on Aug. 27, compared with $831.25/mt on Feb. 27 and above a five-year average of $896/mt.

Crude markets have also remained supported as disrupted flows through the Strait of Hormuz tightened regional supply and increased demand for Middle Eastern medium sour grades. Platts assessed Dubai crude at $71.23/b FOB on Feb. 27, before the war began. The benchmark later reached a wartime peak of $169.75/b on March 23 amid a near-halt in Hormuz traffic and US threats against Iranian infrastructure, before easing to $90.40/b on Aug. 27.

Morgan Stanley now expects a longer supply recovery than previously projected, leaving the market in deficit through the fourth quarter and the first quarter of 2027.

“With that, we revise our Brent forecasts higher, peaking at $100/b in 4Q,” the bank said on Aug. 23. As the conflict passed the six-month mark, the likelihood of a near-term resolution was diminishing, Morgan Stanley said, citing historical data on interstate conflicts.

LNG damage

The LNG disruption may be the most durable supply shock, given the repair timelines now stretching well beyond the immediate conflict period.

QatarEnergy said in March that damage from Iranian missile strikes on its Ras Laffan Industrial City LNG facilities would take three to five years to repair, forcing the company to declare force majeure on some long-term contracts. QatarEnergy CEO Saad al-Kaabi said in a March 19 statement that about 17% of Qatar’s export capacity had been taken offline in the attacks.

Shell’s Pearl gas-to-liquids facility in Ras Laffan, which was also damaged in the March strikes, faces a long recovery. Shell CEO Wael Sawan said on an earnings call on July 30 that repairs to the plant’s second train should be completed and the facility should be “ready to go” by the end of the first quarter of 2027.

Source: Platts