By Tsvetana Paraskova of OilPrice.com

Oil tanker rates have soared since the U.S. and Iran announced the memorandum of understanding as oil importers scramble to charter vessels to pick up Persian Gulf cargoes in the hope these can transit the tentatively reopening Strait of Hormuz. 

One tanker has been provisionally booked to ship crude from the Persian Gulf to India at a rate that’s nine times the benchmark for the route, shipbrokers told Bloomberg on Wednesday.  

South Korea’s Sinokor shipping group, which before the war went on a buying and chartering spree to control about 120 very large crude carriers (VLCCs), will provide one of these supertankers for the shipment of a cargo of up to 2 million barrels from the Persian Gulf to India. The rate at which the tanker has been provisionally booked is 897% of the MEG-India benchmark route, or nine times higher than the normal freight cost, shipbrokers told Bloomberg. 

Tanker rates have surged since last week as the industry is preparing for a return of supply from the Middle East. 

According to Reuters, the cost of hiring a tanker in the Gulf has nearly doubled in just a week, jumping from around $106,000 per day to more than $190,000 per day. For some VLCCs hauling cargoes through the Strait of Hormuz, daily earnings have surged to nearly $470,000—a level that would have seemed absurd before the war began. 

Eager to balance continued risks around Hormuz and market opportunities emerging after an interim deal was signed between Iran and the US, shipowners have been repositioning their vessels. Some have already begun to redirect their tankers to the gulf, with around 65 empty VLCCs now able to reach the Gulf of Oman within a week. Sinokor owns around 25 of those, according to brokers’ estimates.

Since the agreement last week, four empty Sinokor VLCCs have sailed into the Persian Gulf, based on transponder signals and shipping data reviewed by Bloomberg. Three other supertankers owned by mainstream companies have also entered, adding at least 14 million barrels worth of capacity to the region. An Iranian VLCC has separately sailed into the area.

The spike in rates for the Middle East Gulf (MEG) routes have also pushed up spot freight rates in other regions as the competition for who will line up most of their tankers outside Hormuz first is intensifying. 

Some of the biggest state-owned refiners in China and India have failed to procure supertankers to load crude from the Persian Gulf later this month as tanker rates are too high and guarantees on safe passage through the Strait of Hormuz lacking. 

“There are tankers available, but the problem is it's too expensive and there is no guarantee you can exit the strait,” an executive at PetroChina told Reuters last week.