Photo credit: Shutterstock/Igor Grochev
By Prejula Prem and Alex Longley
(Bloomberg) –The cost of moving gasoline and other fuels on ocean-going tankers is soaring days after sanctions targeting Russia’s petroleum sales.
Daily earnings for relatively tiny tankers delivering refined fuels in the Atlantic ocean have surged more than 400% this week, reaching $55,857, according to the latest data from the Baltic Exchange in London. They surged by 58% on Thursday alone, the largest one-day gain since late 2021.
The surge 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,” said Lars Bastian Ostereng, an analyst at Arctic Securities. “Ultimately the spike shows demand is pretty good, and the fundamentals are strong.”
As many as 600 vessels have joined a ‘shadow fleet’ of ships helping Russia to keep its petroleum flowing. That in turn is leaving fewer vessels serving other oil exporters and is boosting the cost of freight.
Related Article: Russia’s ‘Shadow Fleet’ of Tankers Swells to 600 Ships, Trafigura Says
The surge isn’t purely about tankers switching to Russian trade.
The European Union banned Russian fuel imports from Feb. 5. Prior to that, the bloc lifted its purchasing of refined products from elsewhere to ensure plentiful supply, something that displaced some vessels in an already-thinly stretched fleet.
Now as buying picks up elsewhere, rates are spiking. Ships sailing from Europe to West Africa posted their biggest daily gain since figures began being published last year on Thursday.
A switch of some tankers to Russia may be contributing though.
“What we hear is that many vessels suddenly were removed from tonnage lists and drawn towards Russia,” said Eirik Haavaldsen, a shipping analyst at Pareto Securities AS in Oslo. “So suddenly vessel supply was almost gone yesterday.”
© 2023 Bloomberg L.P.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 110,123 members that receive our newsletter.
Have a news tip? Let us know.
Two undersea fiber-optic communications cables in the Baltic Sea, including one linking Finland and Germany, were severed, raising suspicions of sabotage by bad actors, countries and companies involved said on Monday.
One year after the hijacking of the M/V Galaxy Leader, the maritime industry continues to grapple with an unprecedented crisis in the Red Sea. The car carrier, en route to...
The 2017-built Maersk Halifax has become the first large containership to be converted to methanol fuel, Maersk announced on Monday. The extensive retrofit operation, which concluded at the end of...
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 110,123 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
