The inability for oil tankers to travel through major sea channels, known as chokepoints, can cause supply delays and higher shipping costs, increasing energy costs globally, according to the U.S. Energy Information Administration. Chokepoints are narrow channels along global sea routes that are widely used for transporting oil.
“While most chokepoints can be circumvented by using other routes that add significantly to transit time, no practical alternatives are available in some cases,” according to the EIA. “Chokepoints may also expose oil tankers to theft from pirates, terrorist attacks, political unrest and shipping accidents.”
The Strait of Hormuz leading out of the Persian Gulf sees the most oil transit volume, followed by the Strait of Malacca, which connects the Indian and Pacific oceans. “The Cape of Good Hope, near the southern tip of Africa, is a major oil trade route and potential alternate route to certain chokepoints,” according to the EIA.
The size of the chokepoints can limit the vessel size that can travel through them. The Average Freight Rate Assessment system classifies tanker vessels based on deadweight tons, or the amount of cargo it can carry. “The approximate capacity of a ship in barrels is determined using an estimated 90% of a ship’s deadweight tonnage, which is multiplied by a barrel-per-metric-ton conversation factor specific to each type of petroleum product and crude oil, because liquid fuel densities vary by type and grade.”
The most common vessels in the global tanker fleet are long range (LR) class ships, which carry refined petroleum products and crude oil. “An LR1 tanker can carry between 345,000 barrels and 615,000 barrels of gasoline (14.5 [million to] 25.8 million gallons) or between 310,000 barrels and 550,000 barrels of light sweet crude oil.” Very Large Crude Carrier (VLCC) vessels haul the majority of crude oil worldwide and can transport between 1.9 million and 2.2 million barrels of a West Texas Intermediate-type of crude oil.