- EU’s ban on seaborne imports of refined petroleum products will come into force in early February.
- Europe is structurally short of diesel and will need to replace Russian imports with cargoes from exporters such as Saudi Arabia and India once the ban kicks in.
Shipowners rush for tankers to move Russian oil this winter, says Bloomberg.
European Union and oil tankers
According to E.A. Gibson Shipbrokers Ltd. in London, about $1 billion was spent on secondhand ice-class tankers during May-August which is approximately five times the amount invested a year earlier.
Oil tanker owners snapping up cargoes in icy seas could assist Moscow to overcome the peril of a shipping bottleneck this winter.
European Union sanctions are about to make Russia’s crude and fuel exports harder because nearly all of the bloc will no longer import seaborne cargoes.
Tight market
Russia’s Baltic ports are a major export hub for petroleum products and diesel. According to data from Vortex Ltd, compiled by Bloomberg, the majority of them are sent to Europe.
Many barrels are likely to be shipped further afield, potentially tying-up ice-class tankers once the EU’s ban on seaborne imports of refined petroleum products comes into force in early February.
Jens Christophersen, an executive vice president at Hafnia Ltd, said, “The severity of winter will dictate the extent of the season, but in general, ice-classed tankers will be required during the first quarter.”
Alternative trade
Christophersen said that if a scarcity of tankers develops, a new trade involving ship-to-ship transfers would evolve.
Europe is structurally low on diesel and will need to supplant Russian imports with cargoes from exporters such as Saudi Arabia and India once the ban kicks in.
Baltic Exchange data show that these suppliers are considerably further away which adds to the burden on the oil product tanker fleet. Costs for hauling refined fuels have ascended since the onset of 2022.
Christophersen said, “We possibly have yet to see the major impact of the sanctions. It is a scenario that rates will increase further.”
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Source: Bloomberg
