Russia has shipped more than 10 million barrels of crude oil via the Northern Sea Route so far this year, boosting supplies to China as buyers seek alternative sources amid disruptions to Iranian exports and concerns over Middle East shipping routes, two trade sources said and LSEG shipping data showed.
The NSR, which links Russia's western ports with Asian markets through Arctic waters, is typically navigable from July to October and offers a shorter route to Asia than the usual passage through the Suez Canal. Russia shipped some 13 million barrels via the Arctic route during the whole of last year's navigation season, suggesting this year's demand for supplies via the NSR is strong.
According to LSEG data, China has been the sole destination for crude cargoes transported via the route so far this year. Traders said, however, that deliveries to other Asian countries, including India, are planned later in the season.
Data showed that 12 oil tankers have used the Arctic route this year, all of them currently scheduled to discharge their cargoes in China.
China has recently increased purchases of Russian crude amid a tightening of Iranian oil supplies and concerns over transit through the Strait of Hormuz, traders said, pushing premiums for Russia's Far East ESPO Blend crude for November delivery to China to record highs.
Russia has been promoting the NSR as an alternative trade corridor as geopolitical tensions and security risks affect other regular shipping lanes.
Rakesh Mishra, director of Indian logistics company Y&H Cargo, told Russia's TASS news agency at the Eastern Economic Forum in Russia this week that the route's importance is increasing because of growing uncertainty in the Middle East.
"Now the situation in the Middle East is not very clear, and many carriers cancel their service through the Suez Canal," Mishra said.
(Reuters)
