Quantifying transportation costs by oil company. US and North Sea producers most advantaged, Asian refiners the hardest hit

Freight rates have surged 10-50x across all tanker classes since year start, leading to a wide divergence in realized price and margins for E&Ps and Refiners across the globe, and a return to regional trading in a traditionally global market. We introduce a route-by-route analysis with an evaluation of the relative advantages of oil producers and refiners, based on their geographical location and their long-term tanker availability. Shipping crude costs have risen up to $40/bbl on the longest hauls (vs $1.6/bbl a year ago). On the upstream side, North Sea producers (VAR, Aker-BP, Harbour, Equinor) and North American producers are relative winners due to end-market proximity. On the refining side, US Midwest and Gulf Coast refiners remain largely insulated due to access to domestic crude delivered via pipeline, while European refiners face an estimated $11-17/bbl increase in freight costs versus historical norms. Mediterranean refiners are better positioned than Northwest European, whil