• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 17 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 15 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 16 hours The United States produced more crude oil than any nation, at any time.
  • 16 hours How Far Have We Really Gotten With Alternative Energy
  • 15 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 1 day Bankruptcy in the Industry
Energy Stocks Rally Under The Radar

Energy Stocks Rally Under The Radar

Big Oil is trumping the…

U.S. Oil Is Stealing Market Share from OPEC+

U.S. Oil Is Stealing Market Share from OPEC+

U.S. oil is encroaching on…

North Sea Oil and Gas Firms Continue Drilling Despite Climate Goals

North Sea Oil and Gas Firms Continue Drilling Despite Climate Goals

Major North Sea oil-producing countries…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

Tanker Rates Soar 400% On Latest Round Of EU Sanctions On Russia

  • The latest round of EU and G-7 sanctions targeting Russian petroleum exports went into effect last week.
  • Clean product tanker rates have jumped by 400% due to a surge in demand.
  • About 400 tankers recently "switched" from hauling fuels for traditional countries to carrying Russian petroleum products, Trafigura's co-head of oil trading Ben Luckock said.
Tanker

Clean product tanker rates soared last week after the European Union and G-7 nations targeted Russia's petroleum sales. Restrictions on Russian crude exports began in early December. 

Sanctions have redirected Russian energy flows from Europe to Asia. The rejiggering of supply chains means Russia has to rely more on tankers. According to Bloomberg, this has led to a 400% surge in the daily rates for clean product tankers. 

The latest data from the Baltic Exchange in London shows clean product tankers rates have reached $55,857 per day, surging 58% just last Thursday. 

According to trading giant Trafigura, Russia relies on a "shadow fleet" of tankers to move crude and crude products. The trading firm said the fleet is about 600 ships. 

Bloomberg said the surge in tanker rates has been "spurred in part by a bifurcation of the fleet with some tankers serving Moscow's interests and others the international market. It highlights a possible flipside of aggressive measures aimed at limiting Russia's petroleum revenues." 

"Russian volumes continue to flow at more or less the same rate and that takes up a lot of ships."

"Ultimately, the spike shows demand is pretty good, and the fundamentals are strong," Lars Bastian Ostereng, an analyst at Arctic Securities. 

About 400 tankers, or 20% of the global fleet, recently "switched" from hauling fuels for traditional countries to carrying Russian petroleum products, Trafigura's co-head of oil trading Ben Luckock said in a recent Bloomberg interview. That has reduced the number of tankers for traditional routes and is leading to the skyrocketing cost of freight. 

Bloomberg pointed out that surging rates aren't entirely because of the tanker "switch." It's also due to more crude flowing by water following Western sanctions on Russia. Much of those energy exports are now being sent to Asia. 

"We see no indication that Russia will have to cut back its exports of crude or refined products," said David Wech, chief economist of Vortexa, during a presentation late last week.

Furthermore, crude prices have edged over $86 a barrel following last Friday's announcement that Russia will reduce crude oil production by 500,000 barrels per day. This is in response to Western price caps on purchasing Russian fuel. 

ADVERTISEMENT

By Zerohedge.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News