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‘Self-cancellations’ of Russian oil increase by 1,600% in fares

By Anastasia Vamvaka

Avoiding Russian oil has dramatically increased premiums for adventurous merchants and shipowners willing to take the risk and transport Russian crude amid an indefinite and evolving patchwork of financial, shipping and banking sanctions.

The vague and complex geopolitical risk posed by Russia’s invasion of Ukraine has further affected crude exports, while diesel shipments continue.

Tariffs for 100,000 tonnes of Russian crude from Baltic ports at refineries in northwestern Europe have risen 1,600% to $ 240,000 a day, up from $ 13,500 on February 4, as shipowners face the biggest upheaval in maritime trade in energy commodities. of the Gulf in the early 1990s, according to international analysts on Lloyds’ list.
Rising rates reveal the reluctance of many shipowners to load Russian oil as they reassess compliance and the risk of financial, legal, banking and shipping sanctions imposed across Europe, the United Kingdom and North America. The United Kingdom has imposed sanctions on Russian-flagged and docked ships, affecting some 430 international merchant ships. Canada has also banned Russian oil shipments, and a pending European resolution targets ships previously sailing in Russian ports.

Fares for suezmax tankers (medium to large size with capacity between 120,000 and 200,000 dead weight dwt) from the Black Sea to the Mediterranean gained 800% in eight days to reach almost $ 150,000 per day on March 4, from the loss $ -2,320 a day before the invasion, according to Baltic Exchange estimates.

While the easing of the Russia-Ukraine conflict could catalyze tanker and oil markets, an escalation could lead to greater instability and maintain expensive tanker fares.

Argon and fuel oil from Russia appear to be more affected by uncertainty, while exports of refined products to Europe continue to load and sail.

The coming days will be crucial as most of the cargo already on board were sold or loaded before the Russian invasion.

Whether shipowners and merchants would buy cargo ready for export from March 10 onwards under these new geopolitical conditions remains unclear.

Source: Capital

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