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Shipping Costs For Russian Crude Surge Ahead Of Sanctions

OIL

Shipping costs for Russian crude exports have been increasing significantly ahead of 5 Dec, when Europe will introduce a ban on Russian seaborne crude and the oil price cap.

  • Owners who are still willing to load Russian crude are pricing in more risk.
  • Baltic Sea-to-India rates are being discussed at around $15-20mn/bl for loadings after 5 Dec, when the EU introduces a price cap on Russian crude exports and the seaborne imports ban.
  • This is up from $9-11mn/bl before.
  • The surge in costs reflects the challenges faced by suppliers of Russian crude ahead of the deadline.
  • Some of the top tanker owners in Greece will stop extending shipping and other services for oil produced by Russia.
  • Fewer available ships and the need for Russian oil to be diverted from traditional buyers in Europe to new ones in Asia and the Middle East are also contribution to higher rates.

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