Freight rates for Russian oil shipments from Novorossiysk to India remain high despite a sharp correction in the Mediterranean tanker market, as many shipowners continue to avoid the Russian Black Sea port because of security risks, shipping and trading sources said.
India has been the main buyer of Russia's Urals crude since 2022. Elevated freight costs and limited tanker availability increase costs for sellers and complicate exports.
Mediterranean tanker rates have fallen sharply in recent weeks. According to shipbroker Riverlake, the cost of shipping a 140,000 metric ton crude cargo from the Black Sea to the Mediterranean dropped to 280 Worldscale points (WS) from around WS570 in mid-August.
Cross-Mediterranean freight rates also declined by about 100 Worldscale points since the second half of August to WS280 by early September, Riverlake said. Another broker said rates may have already fallen to around WS200.
By contrast, freight rates for shipping Urals crude from Novorossiysk to India have remained broadly unchanged at about $18 to $20 million per voyage, according to Reuters sources.
Exports from Novorossiysk continue to be disrupted by recurring drone attacks in the Black Sea. Crude loadings from the port more than halved in August from July, according to Reuters calculations.
Shipowners remain willing to load CPC Blend crude from Yuzhnaya Ozereyevka but are reluctant to call at Novorossiysk, market sources said. The reduced tanker pool has helped support freight rates on the India route despite softer Mediterranean markets.
Indian companies face growing logistical difficulties in trade with Russia because shipments through Novorossiysk have become increasingly difficult, Sammy Kotwani, president of the Indian Business Alliance, told the Eastern Economic Forum. Companies are increasingly looking at St. Petersburg, although regular shipping links with India remain limited.
Broker Intermodal Shipbrokers said Black Sea freight rates had eased due to weaker demand and increased vessel availability, but some shipowners continued to avoid the region and redeploy vessels to other markets.
(Reuters)