Supertanker Rates Double After U.S. Sanctions on Russian Oil Trade
Owen Li
12 hours agoSupertanker rates surged in the aftermath of the U.S. sanctions on Russian oil trade and shadow fleet tankers, with rates for the vessels capable of shipping 2 million barrels of crude doubling in one week.
The rates for supertankers, or very large crude carriers (VLCC), soared by 112% to $57,589 per day on the Middle East-to-China route, per data from the Baltic Exchange compiled by Bloomberg.
After the U.S. imposed the most aggressive sanctions yet on Russian oil exports, the daily rates for a supertanker on the U.S. Gulf Coast to China route also surged, by 102%. The rates for hiring a VLCC on the route from West Africa to China jumped by 90%, according to the data.
The outgoing U.S. Administration on January 10 imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.
Many of the vessels, specialized tankers, and shuttle tankers transporting Russia’s oil from the Arctic and Far East Pacific fields and production clusters to Asia have now been sanctioned. It is also believed that about one-fourth of Russia’s shadow fleet is now under sanctions.
As a result, the availability of tankers globally is shrinking. The number of available tankers has plunged, while the number of confirmed tanker journeys globally hasn’t changed too much.
Some shipping routes are already seeing intense competition for available vessels, according to Bloomberg.
Fleet capacity to service Russian exports is expected to tighten significantly, according to Mary Melton, a freight analyst at Vortexa.
The most likely scenario for Russian crude exports going forward is that they will most likely face serious logistical difficulty due to the lack of available tonnage, according to Vortexa.
Global tanker rates could continue to rise if President Trump tighten sanctions and sanction enforcement against Iran’s oil exports, which would also remove part of the shadow fleet from the market.
Souce:oilprice
