Aerial view of a ship at sea.
Suriyapong Thongsawang | Moment | Getty Images
Oil-related transport costs rose after last week’s announcement of tougher US sanctions to drain Russia’s war coffers, in a move that poses a significant threat to Moscow’s maritime distribution chains.
On January 10, the US Treasury Department announced new measures to reduce Russia’s energy revenues, including sanctions against key producers Gazprom Neft and Surgutneftegas, along with 183 ships that were “mainly oil tankers that are part of the shadow fleet, as well as oil tankers owned by Russian-based fleet operators” .
The Finance Ministry added that several of the flagged tankers were carrying both Russian and Iranian oil, and further extended the sanctions to Russia-based marine insurance providers Ingosstrakh Insurance Company and AlfaStrakhovanie Group.
This will deal a critical blow to Russia, which has been forced to divert its shipments of crude oil and petroleum products to Asia and the Pacific after those volumes were banned by European and G7 sanctions, which came into effect in December 2022 and February 2023, respectively. .
Already, about 890 unique tankers have loaded Russian oil — including crude oil and petroleum products — over the past six months, analyst firm Vortex told CNBC on Jan. 7, with 107 of those ships — or 12% of the total — subject to ship inspection. -specific sanctions at that time.
Figures do not take into account the January 10 announcement. On Wednesday, the Paris-based International Energy Agency estimated that about 160 of the 183 blocked tankers transported more than 1.6 million barrels of Russian oil per day last year, accounting for 22% of Russia’s maritime exports in that period.
The latest US measures are also set to tighten the number of vessels available for commission by non-Russian parties, increasing shipping costs for other tankers. Since the Jan. 10 announcement, the effect of the bans has spilled over into freight derivatives, with traded volume of freight forward contracts (FFA) — which can provide traders with a hedge against volatility in variable freight rates — jumping to 11,412 in January. 10, and exceeding 7900 and 6700 on January 13 and January 14, respectively, according to data from the Baltic Exchange. The figures compare with 2,987 and 1,683 contracts traded on average per day in November and December, respectively.
Rates for supertankers transiting from the Middle East Gulf to the Asia-Pacific — a major route for the oil industry — rose more than 40% between Jan. 9 and Jan. 14, according to pricing data from Argus Media.
As a result, the sanctions “could significantly disrupt Russian oil supply and distribution chains,” the IEA warned, noting that Russian exports would “take a hit by reducing the shadow tanker fleet” and “eliminating ship insurance, curbing dominant Russian oil traders and naming key company for handling consumer markets.”
The agency, however, did not factor the latest US moves into its supply forecasts from Russia, noting that crude oil exports from the Eastern European country – a key member of the OPEC+ alliance – fell by 250,000 barrels per day on a monthly basis to 4.6 million barrels per day in December.