Freight rates for oil shipments from Russia's western ports to India remained at record highs in late October, reflecting risks in the Black Sea and a shortage of vessels amid disruptions and strong global demand, three trading and shipping sources said.
High freight rates are driving up costs for Russian oil exporters, as Western sanctions force Russia to ship most of its crude from its western ports to Asia, primarily India and China, via long and costly routes.
Freight costs for shipping Urals crude to India are currently around $30 per barrel or more, depending on the shipowner and destination, up from around $20 in September.
The cost of shipping a cargo of about 100,000 metric tons on an Aframax tanker from Russia's Baltic ports to western India has remained at around $23 million per one-way voyage, compared with roughly $13 million-$16 million in September. A Suezmax tanker can be fixed for the same route at about $27 million, the sources said, adding that shipping costs are eating into sellers’ profits more than ever.
The cost of shipping Urals crude from the Black Sea to India on Suezmax tankers, which can carry about 140,000 tons, has risen to a record $30 million per one-way voyage, up from around $19 million in September, the sources said.
Oil loadings from the Black Sea have been largely disrupted since the summer due to constant drone attacks and war tensions in the region causing long delays in exports.
According to shipbroker Riverlake, the cost of transporting a 140,000-ton crude cargo from the Black Sea to the Mediterranean remained at Worldscale 952 points in October, only slightly below about WS1,000 earlier this month.
“Oil sellers are asking for lower rates, but shipowners don’t want to offer discounts,” one of the sources said.
Another source said the upcoming winter season is likely to make the situation even worse as the weather further complicates shipping.
(Reuters)