Fragile supply chains drive up global energy transportation costs

The global oil and marine fuel market is moving into a more uncertain period, as tensions in the Middle East, restrictions around the Strait of Hormuz and changes in Russian cargo flows continue to affect both prices and maritime transport, according to a recent analysis by MB Shipbrokers, cited by newmoney.

In a recent analysis, MB Shipbrokers said the market is now operating under the weight of increased supply risks, volatile prices and fragile trade flows, with energy transport once again closely tied to geopolitical developments. 

According to the same analysis, Brent and WTI prices fell by 3 per cent and 6 per cent respectively on a weekly basis, as talks between the United States and Iran remained deadlocked. The discussions have centred on Iran’s uranium reserves and the control of navigation in the Strait of Hormuz, one of the most important passages for the global energy market. 

Although Gulf Arab states have urged ships not to cooperate with the new Iranian Straits Authority, MB Shipbrokers noted that Tehran still maintains effective control in the area, given its military presence and its ability to influence the passage of vessels near its coasts. 

This has created a more complex transit regime for shipping companies. Vessels allowed to pass through the Strait are reportedly subject to strict navigation rules, escorts by Iranian naval forces and restrictions on communications. 

At the same time, sea routes beyond the Strait remain exposed to the US naval blockade in the Gulf of Oman, adding another layer of uncertainty for operators already facing higher risk and more complicated voyage planning. 

Meanwhile, Russian naphtha exports continue to be directed mainly towards Asia, with India and Taiwan emerging as key destinations. According to MB Shipbrokers, both markets have benefited from lower Russian cargo prices and steady demand from the petrochemical sector. 

India imported around 250,000 tonnes in May, marking a slight decrease from the previous month, while Taiwan’s imports almost doubled. Since the European embargo, Asia and the Middle East have absorbed most Russian naphtha exports, although demand from the United Arab Emirates appeared weaker in May. 

The shift in shipping routes is also becoming more important. MB Shipbrokers said that almost 300,000 tonnes of cargo loaded in June are heading to Asia via the Cape of Good Hope, as traders continue to avoid the Red Sea because of security risks. 

This diversion adds time, cost and uncertainty to energy transport, while also affecting freight markets at a time when supply chains are already under pressure from wider geopolitical instability. 

At the same time, the International Energy Agency has warned that the oil market could enter a “danger zone” in July and August, as higher summer fuel demand, limited exports from the Middle East and declining inventories create the conditions for tighter supply. 

Analysts say that, unless tensions with Iran ease and supply flows improve, energy market balances are likely to remain fragile. This could have direct consequences not only for oil prices, but also for freight rates and the broader cost of transporting energy internationally. 

المصدر: Cyprus Mail