Tanker Freight Rates for Russian Oil Decrease in July
MOSCOW, July 10 — Freight costs for shipping Russia’s Urals crude oil from western ports to India have dropped this July, offering some relief to exporters. A rise in the availability of vessels and the typical summer slowdown has contributed to this decline, as reported by several trading sources.
Lower shipping expenses are beneficial for Russian oil suppliers, who have been facing squeezed profits due to lesser demand for Urals crude in Asia and a surplus of competing oil options.
According to sources, the cost to ship an Aframax tanker carrying about 100,000 metric tons from the Baltic port of Primorsk to India has fallen to around $7 million to $8 million, down from $10 million to $11 million in June. Similarly, freight rates for Suezmax tankers transporting around 140,000 tons from the Black Sea port of Novorossiisk have decreased to about $10 million, compared to roughly $15 million last month.
Market insiders believe this drop can be attributed to a seasonal decline in demand and an increase in vessel availability after earlier tightening in the freight market.
Concerns have resurfaced regarding shipping routes, particularly through the crucial Strait of Hormuz, due to renewed tensions between the U.S. and Iran. Incidents in recent days have raised alarms over the safety of this key route for global oil exports.
The U.S.-Iran conflict earlier this spring led to a significant rise in tanker rates worldwide, increasing transportation costs for Russian crude as well.
Traders warn that freight rates could spike again if any further disruptions occur in the Strait of Hormuz. Despite these challenges, Russia’s oil exports continue to remain at high levels, which may sustain demand for tankers and put upward pressure on freight prices.
