Bloomberg Surveillance · Thursday, October 1, 2026
John Kartzonis of Breakwave Partners states that the current extremely high shipping freight rates are unsustainable and will ultimately be paid by the consumer. He notes that the cost to move oil has jumped dramatically, making the current situation unviable in the long term. Kartzonis also suggests that insurance costs for tankers in high-risk areas like the Strait of Hormuz are a significant factor.
“That's an excellent question. I think that, yes, probably it will at some point. I'm not sure if it's going to be a crash, but freight rates have to adjust because at the end of the day, who is paying that is the consumer, right? You're paying about 30 bucks a barrel to move the oil from the Middle East to wherever it's going. If you go back a year ago, it was like probably two bucks. This is not sustainable by any means.”
“I mean, the costs are significant, right? And that's why ship owners are getting paid this amount of money to go through the Strait of Hormuz. Whether that's insurance, that's like the extra risk that you're taking. You have seafarers on board, right? explosions left and right, this is not an easy thing to do. But yeah, the costs are significant. And at the end of the day, it's the consumer who's paying this cost because it's the delivered price of the barrel that matters.”