Kathrine Frich
Russia’s oil industry has faced mounting pressure since the start of the war in Ukraine.
Sanctions, price caps and restrictions on shipping and insurance have steadily made exporting crude more difficult.
Now another problem is emerging for Moscow’s most important source of revenue. Rising tensions in the Middle East are beginning to create new obstacles for Russian oil shipments.
Costly detours
The crisis in the Middle East is complicating Russian oil exports, according to reporting cited by the Polish newspaper Rzeczpospolita.
With Indian purchases facing restrictions, Russian companies are increasingly redirecting shipments toward China. That shift requires longer transport routes and the use of the largest tankers, known as VLCCs (Very Large Crude Carriers).
Freight costs for these vessels have surged sharply. Bloomberg reports that even before the U.S. and Israeli attack on Iran, the daily charter price for a VLCC traveling from the Middle East to China had climbed above $200,000.
At the beginning of the year the same rate was below $29,000, meaning transport costs have risen roughly 600 percent.
Growing reliance on china
Data from Vortex and Kpler shows that since December between 6.3 and 6.9 million barrels of Russian Urals crude have been moved from western Russian ports through the Suez Canal to the Red Sea.
There the oil was transferred from smaller tankers onto several supertankers before continuing toward Asia.
“Such actions indicate the growing dependence of Russian oil suppliers on China,” said Anna Żminko from Vortex.
One vessel involved in the transfers was the tanker Sahara, which is under U.S. sanctions.
Longer journeys
Around the Sinai Peninsula, roughly 1.7 million barrels of crude were transferred to the Sahara from several Suezmax and Aframax vessels arriving from the Russian port of Novorossiysk.
From there the shipment continued toward Russia’s Far East, where the oil was transferred again to smaller ships delivering it to China.
The entire process lasted about three months. A typical shipment to India previously took only five to six weeks.
Shifting routes
Bloomberg reports that waters near Egypt are increasingly being used for ship-to-ship oil transfers.
The location has gained importance as companies search for safer transfer points north of the Suez Canal and around Greece and Malta.
At the same time routes near Oman have become difficult to use following the U.S. and Israeli strike on Iran and the presence of U.S. naval forces in the Persian Gulf.
According to estimates, roughly 140 million tons of Russian oil are currently moving through global sea routes while looking for buyers.
Sources: Rzeczpospolita; Bloomberg; Money,pl
