Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

AI Summary. The cost of hiring the largest crude oil tankers from the Persian Gulf to Asia has risen 12-fold in months to a record $1.1m a day, reflecting the danger of crossing the Strait of Hormuz. Rates on routes far from the Middle East have also climbed 400–500%.

Javier Blas Bloomberg
Date Posted:

The cost of hiring a VLCC from the Gulf to Asia has risen to $1.1mm a day, up from ~$100,000 at the start of the year. Costs on other routes not directly impacted by the US-Iran war, such as the Gulf of Mexico to Asia, have also surged 400–500% y/y.

Are soaring oil tanker rates driving the next inflation shock?

Core argument: Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.

The cost of hiring the largest tankers, Very Large Crude Carriers (VLCC), from the Persian Gulf to Asia — a benchmark route — has risen 12-fold in just a few months to a record high of $1.1 million a day. Earlier this year, most shipowners would have considered $100,000 a day a superb price and $50,000 a good one. The $1-million-a-day price tag reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk. But costs elsewhere, even far from the Middle East, have also ballooned. The route from the Gulf of Mexico to Asia is about $338,000 a day, up 400% from a year ago; from West Africa to China stands at about $486,000 a day, an increase of nearly 500%.

Takeaways by Macro Roundup® AI

  1. Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
  2. The $1-million-a-day rate reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk.
  3. Tanker rates far from the Middle East have also ballooned, with the Gulf of Mexico to Asia route at about $338,000 a day, up 400% from a year earlier, and West Africa to China at about $486,000 a day, up nearly 500%.

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  • Goldman Says Gulf Oil Exports at Two-Thirds of Pre-War Level — Goldman Sachs estimates Persian Gulf crude and oil product exports have recovered to about 15–16m barrels a day, roughly two-thirds of pre-war levels and above a trough of 5–6m barrels a day, limiting the Iran war's impact on global crude prices. Transits through the Strait of Hormuz are likely close to US officials' estimates of 8–10m barrels a day.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
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