Shipping costs for Russian crude oil exports from the Black Sea port of Novorossiysk have reached record highs, driven by a tanker shortage and increased security risks. Rates to India and China have surged, making these routes the most expensive ever for Russian oil.
Record high freight costs for Russian crude exports from the Black Sea directly impact the profitability of these shipments and could influence global oil supply dynamics, especially given the ongoing geopolitical tensions and security concerns in the region.
Freight rates for Aframax tankers shipping crude oil from Russia's Black Sea port of Novorossiysk have climbed for seven consecutive weeks, reaching record highs for exports to India and China. The cost to ship a barrel of crude to India has risen to $23.20, and to China, it is $25.70. This surge is attributed to a shortage of available tankers, with many vessels occupied on longer routes in the Middle East and Baltic Sea, coupled with heightened security risks from Ukrainian strikes on Novorossiysk. These attacks have, at times, necessitated the temporary suspension of oil loadings at Novorossiysk and the nearby Caspian Pipeline Consortium (CPC) terminal. Despite the increased shipping costs, analysts note that profits are still being made amid the rally in international crude oil prices.