Freight rates for Russian oil are set to rise amid coming winter, new sanctions, traders say
MOSCOW, Nov 29 (Reuters) -Freight rates for Russian oil transportation are set to rise amid coming winter season and new sanctions against Russian fleet, three traders said on Friday.
Britain has imposed the strongest sanctions to date against Russia's shadow merchant fleet. The new restrictions will affect, in particular, 30 vessels that are part of the so-called shadow fleet, which is used to export Russian oil in circumvention of the Western embargo.
Thus, the number of oil tankers under UK sanctions will reach 73.
The cost of Urals oil shipments from Primorsk, Ust-Luga and Novorossiisk to India has remained stable for the second month in a row amid a sufficient supply of tankers and an expected reduction in sea shipments of oil in December, the traders said.
"Freight rates are stable for now. There is enough tonnage, the export volume is declining," one of the traders said.
For the route from the Baltic ports in Russia to the ports in western India the cost of transportation is $4.9-$5.1 million per standard vessel, little changed from the levels seen in October, the traders said.
Another trader said that stability in freight rates may change soon as seasonal factors weigh on the costs.
The need for tonnage for the export of Russian oil is also growing with the seasonal changes in navigation requirements: ice situation in Russia's Baltic ports will require ICE class tankers, which are less available in the market, the traders said.
Weather conditions in the Black Sea are also getting worse during the winter rising the costs, the traders said. According to the Riverlake agency, costs for oil tankers to pass through the Turkish straits have risen to a maximum since February 2024 and amount to about 10 days for Nov. 1-27.
Reporting by Reuters; editing by David Evans
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