The cost of hiring a large oil tanker on a key Middle East-to-Asia route has exceeded $1 million per day for the first time, as the continuing conflict involving Iran restricts the number of vessels willing to transit the Strait of Hormuz.

Baltic Exchange data showed earnings for Very Large Crude Carriers (VLCCs) on the benchmark Middle East-to-China route reaching about $1.035 million per day. The sharp increase reflects a shortage of available tankers as shipowners remain cautious about sending vessels into the Gulf because of security risks.

The rise in freight costs comes as attacks on commercial shipping and military operations continue around the Strait of Hormuz. Despite efforts to move vessels through the waterway, shipping traffic remains below normal levels, limiting tanker availability for crude cargoes from major Gulf producers.

The disruption is also affecting tanker markets beyond the Gulf, with higher rates reported on alternative crude shipping routes as buyers seek supplies from other regions. Continued high freight costs could increase the expense of transporting crude to major importing countries, adding further pressure to global energy markets.