Wealthion Macro Bites – Tanker Rates Hit a Record $1.27 Million a Day as Shipping Routes Shift

Reuters reports U.S. and Iranian negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.  The talks face a big obstacle as neither side wants to be the first to surrender its leverage.  Separately, French President Macron committed troops to protect a Saudi port on the Red Sea oil route, and a Saudi-led coalition intercepted six Houthi ballistic missiles aimed at cities in the Kingdom.

OilPrice.com reports tanker traffic through the Strait of Hormuz fell to single digits on Thursday (nine vessels) down from the 10-day average of 18.  VLCC charter rates hit a record $1.27M per day after Saudi Arabia diverted 60 million barrels of crude from Yanbu to ship-to-ship transfers off Oman (where capacity has now maxed out).  Average U.S. national diesel prices reached a record $6.52/gal and the Farm Bureau warned the surge is pressuring harvest margins with farmers left "little room to adjust.”  The EU's energy commissioner told the FT the continent faces its "worst winter" for energy prices since '22 and urged President Trump to maintain the "free flow" of diesel to Europe.

Nigerian Solid Minerals Minister Dele Alake and U.S. Deputy Secretary of State Christopher Landau signed a framework agreement in New York on Wednesday aimed at deepening US investment in Nigeria’s mining sector.  The agreement covers geological data, mineral exploration, mineral development and processing, infrastructure and technical capacity building.  Seeking to diversify its economy away from oil, Nigeria estimates its mineral resources are worth $700B.  Alake stated, “Nigeria cannot remain a source of raw materials while others capture ​most of ​the value. ⁠We want more local processing, quality jobs, stronger skills and greater ​opportunities for Nigerian businesses."

Trafigura’s Nyrstar has launched a strategic review of its loss-making Budel zinc smelting operation (315,000t/y) in the Netherlands due to rising energy costs and government policies.  Operations to produce the metal mainly used to galvanize steel will continue as normal during the review expected to conclude by end-‘26.  Nyrstar CEO Guido Janssen cited the Dutch government’s decision not to include provisions for grid cost mitigation for energy-intensive industries in its ‘27 budget in commenting, “The operation is losing money every year and the conditions for next year look particularly difficult, given rising energy costs, together with a lack of supportive government policy.”

Japan's Finance Minister Satsuki Katayama told the FT that President Trump raised the weak yen with Prime Minister Takaichi, signaling the prospect of fresh currency intervention with Treasury Secretary Scott Bessent's backing.  Goldman Sachs cited domestic policy shifts and capital repatriation flows in reversing its bearish yen stance and now sees the currency advancing to 150 per dollar over next 12 mos.

Two more FOMC participants joined the Fed’s increasingly hawkish chorus.  Philadelphia Fed President Anna Paulson [2026 FOMC Voter] said, “Returning inflation to 2% is a top priority, and…if conditions evolve as I expect, some modest further tightening may be warranted.”  New York Fed President John Williams [Permanent FOMC Voter] said, “it’s likely that another rate hike may be appropriate by the end of the year. That seems to be a reasonable way of thinking about it.”