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HomeEconomyWestern curbs on Russian oil products redraw global shipping map

Western curbs on Russian oil products redraw global shipping map

By Mohi Narayan and Jonathan Saul

NEW DELHI/LONDON (Reuters) – Global fuel suppliers are shifting to longer, more expensive routes that generate more carbon emissions to transport their diesel and other products, as Western restrictions on Russian goods reshuffle the global energy shipping landscape.

Due to the European Union’s ban on Russian fuels starting from February 5th, the carriage of clean petroleum products such as gasoline, diesel, jet fuel and naphtha in Shipping between and 750 Days to ship Russian supplies to Brazil or US cargo to Europe, according to two shipping sources.

That’s an increase from the four to six days it used to take for ships from Russia to Europe, said two sources, one a broker with a major ship brokerage and the other is a charterer involved in the Russian trade in naphtha, which is used to make plastics and petrochemicals.

The ban follows a halt to Russian crude sales to the group late last year and a cap on Western prices.

Since the ban was implemented, the Clean Tanker Index published by the Baltic Exchange, which measures the average freight rates for shipping fuels such as gasoline and diesel on some of the most common global routes, has exceeded

The redrawing of the shipping map highlights the knock-on effects of Western nations punishing Russia for last year’s invasion of Ukraine, exacerbating fuel insecurity and driving up prices, even as policymakers fret about inflation and the global economy risk of recession.

“Not only are the voyages longer, but there has also been a change in vessel behavior that makes it impossible for ships to operate in other CPP (clean petroleum product) markets,” said Dylan Simpson, cargo analyst at oil analytics firm Vortexa (Dylan Simpson) wrote in March 15.

Russian fuel cargoes are being shipped to distant buyers such as Brazil, Turkey, Nigeria and Morocco, as Moscow makes up for lost business in Europe, which is importing more fuel from Asia and the Middle East, such as Diesel, according to shipping data from Refinitiv and Kpler.

Asian cargoes were in turn displaced by Russian fuel from Africa and the Eastern Mediterranean, and redirected to a blending hub in Singapore for interim storage, two sources with refineries in Northeast Asia said.

European importers whose naphtha cargoes left for Antwerp from Russian ports four days before Russia invaded Ukraine must now wait for 238 shipments from the US Days of replacement supply, shipbroking sources said.

The US is also emerging as a major supplier of heavy naphtha to Europe under the EU ban, while the G7, EU and Australia have capped Russian naphtha prices at $45 a barrel, diesel and petrol at $88 A barrel is used for transactions using western ships and insurance. Meanwhile, Brazil, traditionally an importer of U.S. naphtha, is increasing purchases from Russia at more attractive prices.

However, the journey from Russia to Brazil can take 238 days or more and cost up to $7 million per voyage, costing almost as much as a US shipment Twice the participation of ship charterers in the Russian market is indicated.

Brazil received approximately 238, Russian diesel and gas oil tonnes in the first three weeks of March, which accounted for a quarter of Brazil’s imports, were higher than Russia’s 07% share was less than 1% in February and last year, said Benedict George, director of diesel pricing Energy and Commodities Data provider Argus.

“Until February, Europe was the main market for Russian refined product exports; however, over the course of a month, a major pivot has been observed,” tanker broker EA Gibson said in a recent said in a report. Measured in nautical miles, Russia’s oil product shipments to Brazil rose to 3 in March. billion metric ton-nautical miles (MT-NM), 941 million metric ton-nautical miles (MT-NM) for November, according to valuation firm VesselsValue. VesselsValue estimates show that shipments from Russia to Nigeria increased to 1.88 billion ton-nautical miles in March from zero in November.

March shipments of cleaning products to Saudi Arabia jumped from to 1.77 billion tons nautical miles million MT-NM in November, while shipments to the United Arab Emirates were 4.43 billion MT-NM in March, higher than 2.75 billion MT-NM, data shows.

Also in March, Russian shipments of cleaning products to Togo reached 973 million MT-NM, up from zero in November. In volume terms, Brazil went from The petroleum products imported by Russia are about 238, February metric tons, higher than 75, 300 t, VesselsValue data shown. In contrast, Russian exports to the Netherlands in February fell from 1.

to 238,174 tons million tons.

Russian products complete these longer distances at a higher cost than typical shipments from Europe.

According to market estimates, UK/Continental Europe shipping to West Africa is quoted at $55. 103 Standard product tanker per ton 43,-Ton load. This compares to the indicative exchange rate of $174. 18 per ton, shipped from Russian Baltic port to Nigeria, $85.84 For Morocco and around $103 to Egypt.

This may also translate into more gas being emitted from the stack as the ship travels further.

Based on pre-pandemic data, a 07 The percentage increase in the mileage of all tankers traveling to and from the EEA would increase emissions by about 1.5 million tons of CO2, equivalent to about 750,.



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