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Is The Oil Glut Coming Back?

Is The Oil Glut Coming Back?

Oil has seen its worst…

Large Tankers Start to Use the Arctic Passage to Make Deliveries to Asia

The Ob River, a large tanker carrying liquefied natural gas (LNG) from Europe to Japan, is the first of its kind to ever attempt the journey using an Arctic passage.

The tanker, chartered by Gazprom to carry its natural gas, set off from Norway on November the 7th and will pass around the top of Russia on its way to Japan; a route only possible due to changing climate conditions that have led to less sea ice.

The low volume of sea ice in the Arctic has opened up two new routes between the Atlantic and the Pacific; one over the top of Canada, known as the Northeast Passage, and the other over Russia, known as the Northeast Passage.

Using the Northeast Passage is expected to cut the journey time by 20 days, or 40%, meaning that the fuel bill for the trip will be 40% lower, which vastly increases the profit of Gazprom.

Related Article: Is Iran Using an Insurance Scam to Cover its Oil Tankers?

Tony Lauritzen, the commercial director of the Greek company Dyngas, explained why the Arctic route is preferable, saying that, “we have studied lots of observation data -- there is an observable trend that the ice conditions are becoming more and more favorable for transiting this route. You are able to reach a highly profitable market by saving 40 percent of the distance, that's 40 percent less fuel used as well.”

“It's an extraordinarily interesting adventure. The people on board have been seeing polar bears on the route. We've had the plans for a long time and everything has gone well.”

By. James Burgess of Oilprice.com



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