EuropeTankers

EU agrees on Russian seaborne crude ban

The European Union agreed on a partial ban on Russian oil in the sixth package of sanctions last night, whereby the purchase of crude oil and oil products from Russia will be forbidden to be delivered by sea but includes a temporary exemption for pipeline crude.

Officials and diplomats still have to agree on the technical details and the sanctions must be formally adopted by all 27 nations.

Hungary, which will still be able to receive Russian oil via pipeline, had been blocking an embargo for the past month. However, it has now received guarantees from the EU that it would be able to receive replacement supplies if the pipelines were disrupted.

VLCCs are cannibalising cargoes which would otherwise be carried by suezmaxes and aframaxes


“Russian producers will be more aggressive offering their oil to importers in India and China, and may be increasingly successful in targeting the Chinese market,” analysts at brokers Lorentzen & Co suggested in a markets update yesterday.

Data from the Signal Ocean Platform suggests Norway, the US, Nigeria and the Middle East will be the main places Europe goes to in seeking replacement oil cargoes.

The change in tanker trading patterns in the months since Russia invaded Ukraine has seen “intense competition” develop between different dirty tanker types in the Atlantic Basin, according to a new report from brokers BRS.

Before Russia invaded Ukraine, there would be between five and ten VLCCs become available for hire in the Atlantic Basin once they discharged a cargo. Broker information suggests that this has increased significantly so that by mid-June it is estimated that an extraordinary 27 VLCCs will be competing to lift crude cargoes in the Atlantic, BRS stated in a new tanker report.

Shipping data indicates that VLCCs have begun to be chartered for intra-Atlantic Basin voyages with several charterers working together to combine their cargoes onto a VLCC. So far this year, BRS data suggests that there have been 58 intra-Atlantic Basin voyages performed by VLCCs, compared with 54 over the entirety of 2021. This includes 10 from the US Gulf to Europe, 10 from Brazil to Europe and 38 from West Africa to Europe.

“The upshot is that VLCCs are cannibalising cargoes which would otherwise be carried by suezmaxes and aframaxes,” BRS stated.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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