{"id":438938,"date":"2026-09-28T14:40:09","date_gmt":"2026-09-28T07:40:09","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-real-oil-shock-isnt-disappearing-its-moving-into-shipping-costs-438938\/"},"modified":"2026-09-28T14:40:09","modified_gmt":"2026-09-28T07:40:09","slug":"the-real-oil-shock-isnt-disappearing-its-moving-into-shipping-costs","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-real-oil-shock-isnt-disappearing-its-moving-into-shipping-costs-438938\/","title":{"rendered":"The real oil shock isn’t disappearing, it’s moving into shipping costs"},"content":{"rendered":"
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If there’s anything the US-Iran conflict has taught us, it is that the oil market has proven remarkably good at finding ways around disruption.<\/p>\n

Barrels are still moving out of the Middle East despite the upheaval around traditional shipping routes. But the main problem is moving them has become extraordinarily expensive.<\/p>\n

And that is arguably where\u00a0the real oil shock is shifting to next. Given enough time, we will be moving from\u00a0outright supply losses and into the cost of moving energy around the world instead.<\/p>\n

Now, oil producers\u00a0have increasingly relied on ship-to-ship transfers around Oman as the conflict disrupts traditional export routes.\u00a0Those transfers are expected to reach roughly 2.5 million bpd in September, up from around 1.4 million bpd in August.<\/p>\n

With the way that they have adapated, it is at least helping to keep\u00a0the physical market functioning. However, it comes at a cost.<\/p>\n

Freight expenses for very large crude carriers on some Gulf routes have climbed above $30 per barrel. That might not sound like a lot. But with crude prices around $100, transportation alone can now account for more than a quarter of the barrel’s cost, compared with just a few percent before the conflict.<\/p>\n

In my view, this is where focusing solely on oil prices risks missing part of the story. Markets are used to thinking about an oil shock through one number, that being the oil price that we see on the screens. But in reality, that is only the starting point.<\/p>\n

There is also the barrel itself. Transportation. Refining. Then, another round of transportation before the finished product eventually reaches businesses and consumers.<\/p>\n

If every stage becomes that little bit more expensive, the inflationary impact can stack up and persist even if oil prices stop climbing on their own. In essence, it is a signal that the physical oil market is becoming less efficient.<\/p>\n

A barrel that previously moved through a relatively straightforward shipping route may now require ship-to-ship transfers, additional voyages, higher insurance costs and even more complicated logistics.<\/p>\n

At the end of the day, the oil still gets to its destination. However, it just costs considerably more to get there.<\/p>\n

As such, I wouldn’t take stabilising oil prices as proof that the energy shock is dissipating or even fading.\u00a0If freight costs start falling off while oil continues flowing, that’s a much stronger signal that the physical market is genuinely normalising.<\/p>\n

But if shipping costs remain extreme, then one can argue that part of the oil shock hasn’t disappeared at all. It has simply just moved downstream.<\/p>\n

Meanwhile, inflation risks linger because keeping oil moving through those alternative routes remains expensive.<\/p>\n

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This article was written by Justin Low at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

If there’s anything the US-Iran conflict has taught us, it is that the oil market has proven remarkably good at finding ways around disruption. Barrels are still moving out of the Middle…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-438938","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=438938"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/438938\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=438938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=438938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=438938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}