Freight Rates for Russia’s Urals Weaken on Tonnage Overhang, Sources Say
Freight rates for tanker shipments of Urals crude from Russia’s western ports to India fell in mid-May due to seasonal factors, an ample supply of shadow fleet vessels, and broader shifts in global shipping. According to sources in shipping and trading, the blockade of the Strait of Hormuz remains in place, while a shift of tankers toward the Atlantic is weighing on rates in Europe.
The demand for Urals in India, one of its main markets, remains strong, supported by the extension of U.S. waivers and the restart of the Nayara refinery after maintenance. Washington on May 18 extended for 30 days a sanctions waiver allowing purchases of Russian oil already at sea to support energy-vulnerable countries facing disruption from the Iran conflict.
Freight Rates Decline Amid Shifts in Global Shipping
The cost of shipping Aframax cargoes from Primorsk to India fell to as low as $13 million, from more than $18 million in late April to early May. Freight for Suezmax tankers on the same route stands at about $16 million per voyage. The cost of shipping Urals from the Black Sea port of Novorossiisk to India on Suezmax tankers has declined to $18 million from $20-$21 million.
Export and Transit Rise Amid Global Shifts
Export and transit of oil through Russia’s western ports rose by around 150,000 barrels per day, or about 9%, in the first two weeks of May versus April, according to data from traders, LSEG, and Reuters calculations.
Original Article: Freight rates for Russia’s Urals weaken on tonnage overhang, sources say | Reuters — Reuters