Global fuel suppliers are turning to longer and costlier routes that produce more carbon emissions to move their diesel and other products as Western sanctions on Russian cargo reshuffle global energy shipping patterns.
As a result of the EU embargo on Russian fuel that began on 5 February, tankers carrying clean oil products such as petrol, diesel, jet fuel and naphtha are traveling between 16 and 18 days to bring Russian supplies to Brazil or US cargo Could Europe, according to two shipping sources.
That’s up from the four to six days a ship used to travel from Russia to Europe, said two sources, a broker at a major shipbroking firm and a charterer involved in the Russian trade of naphtha, used to make plastics and petrochemicals. goes. ,
The ban comes on top of a moratorium on Russian crude sales in the bloc late last year as well as a Western price cap.
Since the start of the ban, the Clean Tanker Index, published by the Baltic Exchange, which measures average freight rates for shipping fuels such as gasoline and diesel on some of the most common global routes, has more than doubled.
The rescheduling of the shipping map underscores the knock-on effects of Western efforts to punish Russia over Russia’s invasion of Ukraine last year, adding to fuel supply insecurity and pushing up prices, while policymakers battle inflation and a global economic downturn. Concerned about risk.
Dylan Simpson, freight analyst at oil analytics firm Vortexa, wrote in a March 31 note, “Not only are voyages much longer, but also the behavior of ships has changed, with ships being diverted from operating to other CPP (clean petroleum products) markets.” have stopped.”
Russian cargoes are headed to far-flung buyers in Brazil, Turkey, Nigeria and Morocco as Moscow looks to compensate for lost European trade, while Europe is importing more fuels such as diesel from Asia and the Middle East, shipping According to data from Refinitiv and Kepler.
Asian cargoes, in turn, are being displaced by Russian fuel in Africa and the eastern Mediterranean, and being redirected to Singapore’s blending center for temporary storage, two Northeast Asian refinery sources said.
European importers whose naphtha cargoes traveled from Russian ports to Antwerp four days before Russia’s invasion of Ukraine will now have to wait 18 days for alternative supplies from the United States, a shipbroking source said.
The US is also emerging as Europe’s top supplier of heavy naphtha amid EU sanctions, while the Group of Seven nations, the European Union and Australia have set Russian naphtha prices at $45 a barrel and diesel and gasoline for trades. capped at $100 a barrel. Western Shipping and Insurance. Meanwhile, Brazil, a traditional US naphtha importer, is increasing purchases from Russia at more attractive prices.
However, the trip from Russia to Brazil can take 18 days or more, and costs up to $7 million per trip, nearly double that of US shipments, said ship charterers involved in the Russian market.
Brazil received about 240,000 tonnes of Russian diesel and gasoil in the first three weeks of March, a quarter of Brazil’s imports, up from Russia’s 12% share in February and less than 1% last year, said Benedict George, head of diesel pricing. With energy and commodities data provider Argus.
“Until February, Europe remained Russia’s primary market for refined product exports; However, in the span of one month, a major pivot has been observed,” tanker broker EA Gibson said in a recent report.
longer distance, more pollution
Measured in terms of cargo miles, which multiply the amount of cargo in metric tons by the distance traveled in nautical miles, the volume of Russian oil product shipments to Brazil increased from 941 to 3.07 billion metric ton-nautical miles (MT) in March. -NM). million mt-nm in November, according to data from valuation company VesselsValue. Estimates from VesselsValue show shipments from Russia to Nigeria rose to 1.88 billion mt-nm in March from zero in November.
Clean product cargoes to Saudi Arabia in March rose to 1.75 billion MT-nm from 31 million MT-nm in November, while shipments to the United Arab Emirates stood at 4.43 billion MT-nm in March from 2.85 billion MT-nm in November . data shown.
Also in March, Russian clean products shipments to Togo increased from zero in November to 973 million MT-nm. In volume terms, Brazil’s oil products imports from Russia were about 284,000 metric tons in February, up from 73,300 tons in September, data from VesselsValue showed. In contrast, Russian exports to the Netherlands declined from 1.15 million tonnes in September to 238,200 tonnes in February.
Those longer distances are being carried at a higher cost for Russian products than normal shipments from Europe.
According to market estimates, the freight rate from UK/European continent to West Africa is $55.77 per tonne for a product tanker of 37,000 tonne standard load. This compares with indicative rates of $174.24 a tonne for Nigeria, $103.84 for Morocco and about $150 for Egypt from Russia’s Baltic ports.
With ships traveling further, this is also likely to translate into more emissions from smokers.
Based on pre-pandemic data, a 10% increase in the mileage of all tankers traveling to and from the European Economic Area would increase their emissions by approximately 1.5 million tonnes of carbon dioxide, equivalent to the emissions of approximately 750,000 cars per year in Europe. Is equal to. said Valentin Simon, a data analyst at the transport and environment think tank in Brussels.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)