The cost of shipping Russian oil from Western ports to India hit record highs in early October. The freight for Urals to Asian markets is now around $30 a barrel or more, limiting Moscow's benefit from high oil prices.
The reasons are related to increased risks in the Black Sea and the continued rise in the cost of tanker shipping worldwide. Russia is forced to divert much of its oil from Western ports to Asia, mainly to India and China, via long and expensive routes.
Up to $30 million per trip
Transporting about 140,000 tons of Urals from the Black Sea to India by Suezmax tanker now costs $27-30 million per trip. In September, the price was about $19 million.
The increase is particularly significant for Russian supplies, as transportation accounts for a significant portion of the final cost of oil shipped to Asian buyers. The data is provided by traders working with Urals, and the calculations for the cost per barrel are from Reuters.
Transports from the Baltic Sea are also more expensive
The cost of a cargo of about 100,000 tons, transported by Aframax tanker from Baltic ports to the West Indies, has risen to an average of $21-23 million for a one-way trip. In September, rates were approximately $13-16 million.
Some shipowners are already offering prices close to $25 million per trip. Thus, the higher freight reduces the effect of the rise in the price of raw materials on Russian export revenues.
On October 13, oil prices fell amid expectations of additional deliveries of diesel fuel from Russia. This eased concerns about supply disruptions related to the attacks on Saudi Arabia.
Sources: marketscreener.com