Gibson Shipbrokers: Weekly Tanker Market Report
Weekly Tanker Market Report: Picking a Side.
With just over 5 weeks to go until the European Union’s ban on Russian crude oil imports come into effect, companies are now being forced to decide which market they wish to trade in. Simultaneously, the G7 oil price cap is also due to enter into force and although the price cap is yet to be finalized and requires EU ratification, the EU’s crude oil embargo looks set in stone. So, the question now turns to who will continue to buy Russian crude post December 5th, and how logistically are they going to transport that crude.
If the price cap fails to materialize, EU shipping companies might be allowed to continue transporting Russian crude to third countries, as has been the case with Russian coal exports following clarification after the EU’s August embargo. Nevertheless, price cap or not, the volumes of Russian crude which can be legitimately transported without falling fowl of EU, US, or UK sanctions (if G7 services are used) is expected to be below today’s volumes. Shipping companies will therefore have to choose their side. The balance of tonnage in both the Russian and non-Russian trading fleets will be critical for the strength of the mainstream crude markets. Ahead of December 5th, it is expected that many companies trading with Russia will pull back to ensure all Russian cargoes on board have been discharged by the deadline and migrate back into non-Russian trade.
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