The dark tanker market becomes competitive
Data from Vortexa, a platform in the energy industry, shows that Iran, Russia and Venezuela are all competing to sell oil to Asia. According to the analysis, Russia’s increasing exports of sanctioned crude have forced some Middle Eastern suppliers to lower prices in the face of competition.
The company is tracking 11 tankers – mostly Aframax-sized vessels with heavy capacities between 80,000 and 120,000 metric tons – that have loaded Russian crude oil in ship-to-ship transfers with the AIS transmitters turned off. Vortexa believes these ships have been loaded 16 times since April.
“There is now a dark market that is getting big,” said David Wish, the company’s chief economist. “The need to export crude oil and products in increasing volumes to far-reaching destinations east of Suez, which also ideally hides assets to attract potential buyers outside China and India, may increase significantly ahead of the sixth EU sanctions package that takes effect around the US early in the year. “.
In 2022, Iran’s oil exports were at their highest level since the imposition of sanctions but have declined since the invasion of Ukraine.
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“As more companies pull back from transporting Russian crude and products, insiders of the sanctioned crude trade will continue to use their tankers to help Russia export oil east of Suez,” said crude oil analyst Armen Azizian.
The Ukraine war created a shift in tanker flows, resulting in an increase in ships traveling from the United States to Europe. Tankers now transport more oil from North American, Brazilian and Guyanese sources to European consumers.
The additional distance Russian oil must travel to reach Asia also contributes to tanker shortages, and a dwindling oil tanker fleet may exacerbate the problem.
EU changes sanctions rules
The European Union announced the relaxation of sanctions rules to avoid the need for illegal transfers and reduce the risk of accidents. Under the new rules, Russian-owned companies Rosneft and Gazprom will be able to transport oil to third countries without restrictions.
The purchase of Russian seaborne crude oil by European Union companies exporting to third countries is allowed, but the amendments to Russia’s sanctions that take effect on Friday make payments related to such shipments prohibited. Big trading companies such as Glencore, Shell and Trafigura have stopped buying Russian oil due to EU sanctions, including restrictions on marine insurance.
“With a view to avoiding any potential negative consequences for food and energy security around the world, the European Union has decided to extend the exemption from the ban to engage in transactions with certain state-owned entities in relation to agricultural product transactions and oil transportation,” the European Union said in a statement on Thursday.
Trading houses told rule makers that the restrictions would have resulted in China and India buying oil through smaller private traders and boosted Russian oil transportation in gray areas with poor accident insurance and handling by older ships more vulnerable to oil spills.
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