Russia faces looming oil crisis as US sanctions hit its shadow fleet, Bloomberg reports
Pravda Ukraine
US sanctions targeting Russia’s oil fleet are creating serious risks for the country’s export capabilities.
Source: Bloomberg
Details: The restrictions, introduced by the US Treasury Department on 10 January, have affected 161 tankers used for transporting Russian oil.
As a result, freight costs for shipping Russia’s Urals crude to Asia have already increased by nearly 50%. Additionally, the price difference between oil at departure from Russia and arrival in Asia, which reflects transport expenses, has also grown significantly.
Julian Lee, an oil strategist at Bloomberg writes that Russia risks facing a genuine shipping crisis. He emphasises that although there have been instances of artificially inflated freight rates to bypass sanctions, the current situation is markedly different.
Lee revealed that 265 tankers used for transporting Russian oil have now been blacklisted. Of these, 112 vessels (26%) are under US sanctions and with additional restrictions from the EU and UK, this share rises to 37%.
Last year, sanctioned tankers carried 45% of Russia’s total maritime oil exports. Including vessels under EU and UK sanctions, this figure increases to 57%.
The situation is further complicated by the state of Russia’s fleet. Some vessels previously used to transport Iranian oil are now being deployed for Russian crude shipments, but analysts warn this may not suffice.
Experts predict that unless sanctions are eased, Russia will face mounting transport costs and potential disruptions to its oil exports.
Background:
- Keith Kellogg, Trump’s special envoy for Ukraine and Russia, stated that the US President is prepared to double sanctions to force Russia to end its war against Ukraine.
- In January, Russia’s oil revenue was near an annual low due to declining oil prices and increased payouts to state-owned oil refineries.
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