RED SEA SHIPPING RECOVERS, BUT COSTS REMAIN HIGH Bank of America reports Red Sea shipping traffic has recovered to 65% of normal levels, up from 50% in September. However, oil tanker rates remain elevated at up to $650,000 per day, while dry bulk rates are up 31% year-over-year. The key takeaway: Shipping is recovering, but high freight costs continue to threaten global inflation. Source: Bank of America Research

Bank of America reports that Red Sea shipping traffic has recovered to 65% of normal levels, up from 50% in September, yet oil tanker rates remain elevated at up to $650,000 per day. The transmission channel runs through freight and insurance costs rather than physical crude supply: partial rerouting of vessels around the Cape of Good Hope lengthens voyage times and absorbs tanker capacity, keeping delivered crude costs elevated even as transit volumes improve. Crude benchmarks and refined product spreads are most directly exposed, since higher shipping costs widen the delivered price of Middle Eastern barrels into European and Asian markets, while Middle East equities and regional sovereign and corporate credit are sensitive to any renewed escalation in the corridor. For Bank of America, the report reflects its role as a commodities research voice rather than a direct market mover, though its trade-finance and energy lending exposure makes shipping-cost persistence relevant to client flows. The next catalyst to watch is the weekly tanker rate and Red Sea transit data from shipping trackers, which will show whether the 65% recovery is sustaining and whether rates begin

Crude oil (WTI/Brent) reacts in real time to OPEC+ production decisions, EIA weekly inventory reports, geopolitical supply disruptions (Middle East, Russia, Venezuela) and US Strategic Petroleum Reserve announcements. A 5% intraday move on breaking news is not unusual.

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