The cost of hiring an oil supertanker has passed $1.2mn a day for the first time on routes between the Middle East and Asia, adding to the spiralling pressure on global energy markets triggered by the war in Iran. The conflict has caused a severe shortage of the world’s largest tankers, known as Very Large Crude Carriers (VLCCs), because ships are having to redraw their routes and travel much longer distances. Rates between the Middle East and China have more than doubled since late August for the largest class of carrier, which holds around two million barrels, according to shipbroker Braemar.

For most of last year, rates for VLCCs hovered between $20,000 and $50,000 a day. Before the conflict began, a structural shortage of ships had already propelled the cost for Gulf cargoes to a historic high of $120,000 a day in February, according to the Baltic Exchange. The soaring cost of transporting oil has forced some refineries to start cutting production as their profitability falls, even as the price of refined fuels also hits record highs. Diesel prices in Singapore are around $180 a barrel, and well over $200 a barrel in both the US and Europe.

Shipping costs have been inflated because the war in the Gulf has forced refineries to start looking further afield for their crude, tying up ships for longer periods of time. Around 15 per cent of the world’s tanker fleet is waiting off the Omani coast, shipbroker Clarksons estimated. Tankers travelling in the Middle East also face enormous insurance costs that in some cases amount to around 10 per cent of the value of the hull of the ship. Some of China’s largest independent refineries have started to reduce their production, reported Argus Media last week.