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Ton-mile demand generated by Russian crude oil exports has tripled since the start of the war with Ukraine

Analysts at New York-based tanker brokers Poten & Partners have crunched the numbers to highlight how dramatically Russia’s oil exports have changed in the 11 months since the start of the invasion of Ukraine.

Contained in a new report are many startling statistics which neatly encapsulate how the tanker trades were turned on their head in 2022.

Seaborne crude oil exports from Russia peaked in April last year at 4.3m barrels per day and overall volumes have been gradually declining since then, according to Poten.

India has been the biggest beneficiary of the shift in trade flows as Europe shunned Russian oil. Exports to India increased from virtually nothing prior to the invasion to 1.2m barrels per day in November last year, making India the largest seaborne importer of Russian crude, at the expense of lower purchases from Middle East producers. Exports to India eased slightly in December, but are looking like they are coming back strong in the first three weeks of this year. China also increased its intake of Russian crude, from around 600,000 barrels per day at the start of 2022 to around 940,000 barrels in November.

The Poten study also looks at the ageing fleet of tankers now servicing Russian oil exports. In January 2022, 40% of the aframax voyages out of Russia were done on tankers that were younger than 10 years and only 28% on vessels that were older than 15 years. No vessels older than 20 years were utilised. By December, according to Poten, this age profile had changed dramatically. Only 22% of the aframaxes were less than 10 years old and 50% were over 15 years old. Several voyages were performed on vessels older than 20 years and one aframax employed was even older than 25 years.

“The overall impact on the tanker market has been positive with longer voyages driving more ton-mile demand,” Poten noted, adding: “The ton-mile demand generated by Russian crude oil exports has tripled since the start of the war. This trend has been very supportive for the freight market and is likely to continue in 2023.”

Kepler Cheuvreux, a French research outfit, has also been studying Russian oil exports recently, noting that while exports are still flowing, this is only possible because of very steep price discounts.

“Russia is probably using ‘dark/grey’ oil traders in order to continue to export its oil by the seaborne route, but it is getting severely squeezed,” Kepler Cheuvreux noted in a recent report.

Kepler Cheuvreux argued that India and China will not take much incremental Russian crude beyond what they were importing in November 2022.

“We doubt India and China will dare to go above the 25% threshold when it comes to Russian crude dependence (both countries are currently above 20% dependent on Russia crude imports),” Kepler Cheuvreux predicted.

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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