Tanker Rates To Haul Gasoline Soar 400% After Russian Sanctions
By Tyler Durden | Zero Hedge | February 14, 2023
Clean product tanker rates soared last week after the European Union and G-7 nations targeted Russia’s petroleum sales. Restrictions on Russian crude exports began in early December. The sanctions have been a ploy by Western countries to limit Russian crude and crude product exports, though it’s definitely not working.
Sanctions have redirected Russian energy flows from Europe to Asia. The rejiggering of supply chains means Russia has to rely more on tankers. According to Bloomberg, this has led to a 400% surge in the daily rates for clean product tankers.
The latest data from the Baltic Exchange in London shows clean product tankers rates have reached $55,857 per day, surging 58% just last Thursday.
According to trading giant Trafigura, Russia relies on a “shadow fleet” of tankers to move crude and crude products. The trading firm said the fleet is about 600 ships.
Bloomberg said the surge in tanker rates has been “spurred in part by a bifurcation of the fleet with some tankers serving Moscow’s interests and others the international market. It highlights a possible flipside of aggressive measures aimed at limiting Russia’s petroleum revenues.”
“Russian volumes continue to flow at more or less the same rate and that takes up a lot of ships.”
“Ultimately, the spike shows demand is pretty good, and the fundamentals are strong,” Lars Bastian Ostereng, an analyst at Arctic Securities.
About 400 tankers, or 20% of the global fleet, recently “switched” from hauling fuels for traditional countries to carrying Russian petroleum products, Trafigura’s co-head of oil trading Ben Luckock said in a recent Bloomberg interview. That has reduced the number of tankers for traditional routes and is leading to the skyrocketing cost of freight.
Bloomberg pointed out that surging rates aren’t entirely because of the tanker “switch.” It’s also due to more crude flowing by water following Western sanctions on Russia. Much of those energy exports are now being sent to Asia.
“We see no indication that Russia will have to cut back its exports of crude or refined products,” said David Wech, chief economist of Vortexa, during a presentation late last week.
Furthermore, crude prices have edged over $86 a barrel following last Friday’s announcement that Russia will reduce crude oil production by 500,000 barrels per day. This is in response to Western price caps on purchasing Russian fuel.
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Oh but just think of all the green energy that we are enjoying, saving the planet from imminent destruction. Never mind the billions of waste masks scattered all over the globe and oceans. Besides, fossil fuels are going to become obsolete soon, so we won’t need the shipment of petroleum produtcs………until the green movement is generally recognized as the false flag that it is and the suffering because of it becomes intolerable. Then we will race to open and modernize nuclear power plants, return to fossil fuel derivatives, the use of coal and other abundant sources of energy. But at the moment we are plagued with abundant “hot air” and BS by too many “stake holders”.
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