Russian Oil Freight Rates Remain High Amidst Tanker Shortage, Black Sea Attacks

Freight rates for oil shipments from Russia's western ports to India remained at record highs in late October, reflecting risks in the Black Sea and a shortage of vessels amid disruptions and strong global demand, three trading and shipping sources said.

High freight rates are driving up costs for Russian oil exporters, as Western sanctions force Russia to ship most of its crude from its western ports to Asia, primarily India and China, via long and costly routes.

Freight costs for shipping Urals crude to India are currently around $30 per barrel or more, depending on the shipowner and destination, up from around $20 in September.

The cost of shipping a cargo of about 100,000 metric tons on an Aframax tanker from Russia's Baltic ports to western India has remained at around $23 million per one-way voyage, compared with roughly $13 million-$16 million in September. A Suezmax tanker can be fixed for the same route at about $27 million, the sources said, adding that shipping costs are eating into sellers’ profits more than ever.

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