High Freight Costs to Widen Crude Spreads: What It Means for Oil

In a report examining how elevated shipping costs are widening crude differentials and lifting product prices, the analysis argues that near-record freight rates are altering established trading patterns and reshaping the economics of both crude producers and refiners. Although most traded crude benchmarks are priced free-on-board and exclude transport and insurance, buyers must still cover delivery costs, so high freight raises the effective price of delivered oil and can soften refiners’ crude demand or push them towards closer suppliers.


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