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Oil tanker costs rise to astronomical ranges

  • Skyrocketing oil tanker costs are weighing on the bodily commerce of crude oil.
  • On Monday, the benchmark for crude oil buying and selling topped $100,000 a day.
  • Declining spot worth premiums for numerous crudes, nonetheless, may offset excessive delivery prices, merchants instructed Bloomberg.


Rising tanker costs weighed on crude commerce two weeks forward of the most important bodily oil circulate uncertainty this yr – the EU’s embargo on Russian crude imports and the related worth cap on Russian oil.

On Monday, features on the benchmark for crude oil buying and selling topped $100,000 a day, in accordance with Bloomberg’s. plans. That is the best share of crude oil tankers for the reason that begin of 2020, simply earlier than Covid diminished international oil demand.

The a lot larger value of transporting crude oil this yr is a results of the longer journeys many tankers are actually taking as a result of EU sanctions on exports from Russia. Russian oil cargoes from Baltic ports in Russia now journey months on the return journey to Asia – now Moscow’s foremost export market – as a substitute of per week from a Russian Baltic port to Rotterdam within the Netherlands.

Declining spot worth premiums for numerous crudes, nonetheless, may offset excessive delivery prices, merchants instructed Bloomberg.

The rise in delivery prices provides additional uncertainty for crude patrons, on high of the EU commerce embargo and worth caps that take impact on December 5. After that date, Russian oil should be offered at or under a sure worth – but to be introduced – or the cargo won’t be able to make use of Western delivery companies, together with financing and insurance coverage.

Some specialists say that there usually are not sufficient non-western tankers out there to hold the present quantity of Russian oil available on the market. But different specialists level out elevated ship purchases from unknown sources in latest weeks to organize what they imagine is Russia mimicking the oil export practices of Iran and Venezuela, which have been exporting their crude underneath the radar for years now after the USA sanctioned their oil exports in 2018 and 2019, respectively.

By Tsvetana Paraskova for Oilprice.com

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