Crude supply is rising, but oil prices have not eased. In an Oct. 9 report, JPMorgan said the market bottleneck has shifted from a shortage of crude to a lack of maritime capacity. As Middle East exports recover, limited tanker availability is driving up freight costs, meaning additional supply may not quickly translate into relief for buyers.
Hormuz exports rise as tanker capacity tightens
Crude shipments through the Strait of Hormuz reached 12 million barrels a day in September, up from 7.5 million barrels a day in both July and August. The increase in exports, however, has not removed pressure on prices.
JPMorgan analysts Natasha Kaneva, Lyuba Savinova and Artem Fakhretdinov said the central issue is now how to move crude out of the region, rather than whether sufficient supply exists underground or at production sites.
The report said 766 of the world’s 923 very large crude carriers, or VLCCs, were in service as of September. Another 124 Iranian vessels are largely unable to access mainstream shipping markets because of U.S. sanctions. That has constrained vessel availability and reduced fleet turnover. Some voyages have also become longer because of diversions, while ship-to-ship transfers can take as long as 10 days.
Excluding vessels used to transport Iranian crude, the number of VLCCs required to move Middle Eastern oil is 35 ships above the 2025 average. The analysts described the shift in market pressure in simple terms: in April, the concern was a shortage of crude; by October, transportation costs had become the main constraint.
VLCC daily rates top $1.16 million
The capacity squeeze is visible in tanker charter rates. On Oct. 7, a VLCC bound for South Korea was fixed at $1.162 million a day.
Such freight costs raise the expense of delivering crude from production areas to refineries. Even with exports increasing, buyers may continue to face higher landed costs. As of Oct. 9, Brent crude was trading near $102.77 a barrel, while U.S. crude was around $93.13 a barrel.
JPMorgan also warned that higher transportation costs are putting pressure on refinery margins. Refining margins in Europe had turned negative, and some facilities could respond by reducing output.
Stockpile releases face transport limits
Earlier this month, the Group of Seven agreed to release 100 million barrels from emergency reserves. U.S. President Donald Trump also said the Strait of Hormuz was no longer driving gasoline prices.
JPMorgan’s analysis highlights a practical constraint on supply measures: if suitable vessels are unavailable, the speed at which additional crude reaches its destination will still depend on shipping capacity and freight costs.
That makes tanker availability and charter rates important variables alongside production, exports and inventories when assessing the crude market. As long as freight remains elevated, releasing more oil may not quickly reduce buyers’ actual procurement costs. For refiners, shipping expenses could continue to influence production decisions.