Oil tanker rates are surging again, with some medium-sized ships fetching more than $100,000 a day in Europe. 

The rally is the latest in a string of increases driven by a market in which vessels are sailing longer distances to deliver supplies since Russia’s invasion of Ukraine, cutting the availability of ships. The threat of Israel’s war with Hamas spilling into the wider region has also added a risk premium to tanker earnings in recent weeks. 

Vessels hauling crude from the North Sea to mainland Europe were earning $101,000 a day this week, the highest since December and more than twice the year-to-date average, according to data from the Baltic Exchange in London. On a global level, Suezmax ships which are capable of hauling 1 million barrels of crude are earning more than $60,000 a day on average, the highest since April. 

In addition to wider market tightness, the recent upturn has been aided by larger cargo volumes in the so-called Atlantic basin region, which includes Europe, North America and West Africa. Shipowners said vessel supply lists in those regions and the Mediterranean had been looking stretched lately.

“The strength appears driven mainly by seasonal factors and increased cargo flow in the Atlantic Basin,” Jefferies analysts including Omar Nokta wrote in a note. “The tanker supply-demand balance is tight and the risk premium is more elevated now that two wars are ongoing.”