Freight, connection capacity and withdrawal rate are setting the price this fortnight. The commodity is not the scarce part.
The clearest place to see the distinction is freight. Tanker rates on the benchmark route from the Middle East to China reached a record near $800,000 a day on 11 September, on Bloomberg data reported by OilPrice, with a supertanker run from the United States Gulf Coast to Asia quoted around $29.5 million a voyage, equivalent to roughly $15 a barrel before war risk or delay charges. Shipbroker Fearnleys, in its weekly report for the week ended 9 September, described vessel availability as thin enough that a prompt Fujairah cargo could plausibly clear Worldscale 400, four times the flat rate, a level the broker acknowledged would have sounded absurd not long ago.
The more telling number sits away from the strait itself. VLCCs (Very Large Crude Carriers, the biggest class of oil tanker) moving from Oman to China, a route that starts outside the Strait of Hormuz altogether, are costing $571,000 a day, roughly 10 times last year's average. A cargo that never has to run the chokepoint is still pricing in the same scarcity, which says the binding constraint is available tonnage (the amount of ship capacity in the market) and voyage length rather than transit risk on one stretch of water. The forward market takes the same view: Kpler expects VLCC earnings to hold above $100,000 a day into early next year, against historical levels above $45,000, and Morgan Stanley expects two-year charter rates to rise a further 20 to 30%. None of that describes how much oil was produced. It describes how long each cargo ties up a vessel, and for how much longer the market expects that to stay true.
Alex Grant, who runs crude, products and liquids trading at Equinor, made the same point to Bloomberg at the APPEC conference in Singapore: several bottlenecks arrived at once, and the stress is showing up in freight rather than in availability. Manu Sehgal of the Indian refiner HPCL Mittal Energy put it more bluntly to the same publication, saying the volume is there and the obstacle is transit.
For a Dutch buyer this matters more than it first appears. A fixed price contract fixes the commodity. It does not fix freight, it does not fix transport capacity on the grid, it does not fix the carbon cost attached to an imported input, and it does not fix how fast gas can physically leave storage on a cold morning. If the marginal euro this winter is moving in those four places, then a buyer who has fixed the commodity and left delivery floating has hedged the half of the bill that moved least.
Two things run through all six sections.
The first is that the marginal cost has moved from the commodity to the route. Freight from ARA to Karlsruhe rose roughly fivefold while coal itself stayed short of a breakout. Tanker rates from Oman to China, a route that never touches the Strait of Hormuz, are running at roughly 10 times last year's average, and the forward market expects that to hold into next year. Dutch gas storage looks well stocked by volume and thin by response speed. A hospitality operator in a historic center cannot buy a connection at any price. In each case the scarce thing is a route, and routes are not what a standard supply contract prices.
The second is that the exposures now sit in different instruments from the ones most buyers are holding. Fixing a commodity price is a real hedge against real risk, and it does nothing about freight, transport capacity, withdrawal rate or CBAM. The operations that come through this winter without a surprise will be the ones that have mapped which of those four they are actually exposed to, and in what order.
That mapping is what Energy Portfolio Management® is for. It is a portfolio question rather than a procurement question, and this fortnight has made the difference between the two unusually easy to see. If you are reviewing winter cover before the heating season, the question COMCAM would start with is not what you are paying for the commodity. It is what has to happen for the commodity to reach you, and what it costs you if that takes longer than you assumed.