The costs of chartering vessels to ship Russian oil are skyrocketing as more tanker owners refuse to ship it on the eve of new EU sanctions, Bloomberg reported. Owners who are still willing to load Russian crude are attempting to charge more for the risk, the publication says.
According to information Bloomberg received from shipbrokers, rates for transportation from terminals in the ports of the Baltic Sea to India are being discussed at about $15 million ($20 a barrel) for loadings after December 5 when new EU restrictions kick in. Earlier rates ranged from $9 million to $11.5 million.
Fewer available ships and the need for Russian oil to be diverted from traditional buyers in Europe to new ones in Asia and the Middle East are also contributing to higher rates, Bloomberg says.
The publication notes that the exorbitant freight is in turn eroding the value of Russian crudes, such as the flagship Urals grade, at their load port as sellers ensure that the final price of delivered oil remains competitive against alternatives.
On December 5, the US, EU and UK intend to ban their companies from providing transport, financial and insurance services for tankers carrying oil from Russia, except in cases where Russian supplies are paid at a price not exceeding a level to be agreed by the states EU and the G7. Speaking at the Russian Energy Week forum in October Russian President Vladimir Putin said that Russia would not supply energy resources to those countries that would limit their prices.
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