16OCT2019 - NEWS - Dilemma for oil refiners as surging ship costs kill margins

Oil refiners hoping for some fourth-quarter gravy are facing disappointment as surging freight rates inflate the cost of buying crude.

U.S. sanctions on Chinese shipping companies and Friday’s attack on an Iranian tanker have turbo-charged transport costs, with rates on the Persian Gulf to China route at almost six times this year’s average. That’s slashing the margins of refiners, who had been anticipating a boost in profitability due to cleaner ship-fuel rules set to take effect next year.