The soaring cost of moving crude oil across oceans is forcing a reassessment of U.S. exports to Asia, where buyers must weigh the price of American barrels against the cost of transporting them.
The Iran war has sharply increased that burden, leaving exporters facing weaker demand and growing pressure to offer competitive prices.
Orders for U.S. crude for November delivery have fallen to around 25 million barrels, approximately half September levels, according to traders cited by Bloomberg. If the trend continues, shipments to Asia could reach a seven-year low, although the final volume remains uncertain.
The deterioration reflects a dramatic increase in shipping expenses. Chartering a very large crude carrier (VLCC) for a voyage from the U.S. Gulf Coast to China reportedly cost as much as $80 million earlier in October. Rates subsequently eased to around $60 million. For a cargo of 2 million barrels, the latter figure represents approximately $30 per barrel in charter costs alone.
Related:
Freight Costs Squeeze Oil Producers as Asian Crude Trade Shifts
Price Signals Reflect the Changing Trade Economics
The pressure on U.S. exports is part of a wider change in crude-market pricing. When transportation becomes unusually expensive, refiners have stronger incentives to buy barrels from closer suppliers, while exporters serving distant markets may have to accept lower prices to preserve demand.
According to Randy Hawkins, Valero Energy’s vice president of international crude oil supply and trading, shipping crude from the U.S. Gulf Coast to Asia cost around $30–$35 per barrel, compared with approximately $5 in 2025.
The effects vary by grade and destination. Norway’s Johan Sverdrup crude reportedly reached a record premium of $24 per barrel over Brent in early October, according to Wood Mackenzie. The firm linked the increase partly to disruption affecting Saudi Arabia’s East-West pipeline and tighter European supplies of medium-sour crude.
🇶🇦 QatarEnergy has lined up 3 US deals in 2 days.
The world’s second-largest LNG exporter is now buying American LNG.
Cheniere Energy, Inc.: signed, 4m tonnes a year from 2031 to 2054
Venture Global LNG: in advanced talks for at least 3m tonnes a year
Woodside Energy’s Louisiana LNG: in talks for up to 3m tonnes a year over 15–20 years
If all 3 close, that’s about 10m tonnes a year.
Add Qatar’s 70% of the 18m-tonne Golden Pass plant in Texas ( ExxonMobil).
Why would Qatar buy gas from someone else?
Because this year a single strait cut off its exports.
When Hormuz shut, QatarEnergy declared force majeure and bought 33 spot cargoes of US LNG, mostly from Venture Global, to keep supplying Korea, Taiwan, India and Japan.
In LNG your reputation depends on delivering.
Qatar’s customers have 20-year contracts with it.
If it can’t ship from Ras Laffan, it ships from Louisiana.
Then there’s the price.
Many of Qatar’s long-term Asian contracts are linked to crude oil.
US LNG costs about 115% of Henry Hub plus a liquefaction fee of around $2.50.
With Henry Hub near $3, that’s about $6 at the plant before shipping.
So Qatar can buy at a Henry Hub price and sell at an oil-linked price.
Qatar doesn’t set the oil price, but every extra dollar on Brent lifts what its oil-linked buyers pay.
Every US cargo Qatar buys is a cargo Europe and Asia can’t.
The world’s biggest LNG seller is now bidding against its own customers for American supply.
That’s why JKM and TTF sit near $30.
Qatar is buying a second route out and Henry Hub is starting to shape prices in Doha.
— Jack Prandelli (@jackprandelli) October 24, 2026
Some Atlantic Basin exporters, meanwhile, have faced weaker pricing as higher freight costs undermine their competitiveness in Asia. Link Data Services put the premium for West Texas Intermediate at the Magellan East Houston benchmark at around 25 cents per barrel, compared with more than $3 in early September. The reported premium for U.S. Gulf of Mexico Mars crude has also declined, to around $6 per barrel from $17.50 at the end of March.
Longer Voyages Tie Up Tanker Capacity
Behind the pricing changes is a shipping market in which vessels are increasingly occupied by Middle Eastern oil movements.
Disruption around the Strait of Hormuz has encouraged the use of offshore ship-to-ship transfers in the Gulf of Oman, where tankers can spend extended periods waiting to complete operations.
Record tanker rates are choking U.S. crude flows to Asia. A U.S. Gulf-China supertanker hit $80M this month, 10x pre-war rates, and Asian orders for November U.S. crude fell about 50% from September to roughly 25M bbl. #Oil #Tankers #OOTT
https://t.co/cepmW0yE2F
— OilPrice.com (@OilandEnergy) October 24, 2026
Kpler estimates that around 80 VLCCs are supporting this transfer network, with average round-trip times of about 23 days, compared with an optimal nine to 10 days for a Basrah-to-Sohar shuttle voyage.
Longer turnaround times reduce the number of ships available for other routes and add to freight-market pressure.
Muhammad Luqman is Associate Editor at Views News Now. He writes on wide-ranging issues including economy, South Asia, the Middle East, agriculture, economy and innovation. Luqman has worked some of the leading news organizations and won acclaim for his original and research-based works.
