High Tanker Costs Slow Heavy Crude Exports as U.S. Refiners Near Capacity

Heavy crude is building up across the Americas as steep tanker bills constrain exports and U.S. refineries operating at 93.5% of capacity have little room to process more. Buyers in Asia and Europe are facing shortages of heavy grades.

The freight bill for an Americas-to-Asia crude shipment topped $80 million (about $40 a barrel) in the week leading up to Oct. 12. That compared with roughly $10 million to $15 million near the start of 2026. One estimate put a supertanker trip linking the U.S. Gulf Coast with Europe at $46 million, equivalent to $24.50 per barrel with transfers and related charges included. Before the war began in late February, the estimate for that route was $6.5 million, or about $4 per barrel. A recent Gulf-to-China supertanker rate retreat from a record high offered limited relief on one Asian route.

Heavy crude prices have also weakened. On Oct. 8, Western Canadian Select was about $74 per barrel, Colombia’s Vasconia was $84 and Ecuador’s Oriente was $76, excluding freight and insurance. By Oct. 8, all three grades were at their lowest levels in six weeks after losing more than $10 per barrel. Because freight and insurance are excluded, the figures do not reflect the full cost of delivering each grade to a buyer.

Heavy crude is denser than lighter oil and typically costs less. It can yield more diesel, but only some refineries are configured to process it, and their capacity to take extra heavy grades is limited. U.S. refinery utilization was 93.5% for the week ended Friday, Oct. 9, leaving little spare capacity to absorb additional barrels. Exports are costly while domestic processing headroom is narrow.

“You need a ship and the price of ships are going up, and the availability ships are going down,” said Scott Shelton, a TP ICAP energy specialist.

Global diesel exports in September were 700,000 barrels per day below the year-earlier level. Middle-distillate supplies, including diesel, are projected to stay constrained well into 2027. Freight costs are also squeezing refinery margins.