The new Russian oil routes will be a problem for shipping
From December 5, Russian oil imports into the EU stop but, although there are no shortage of new buyers, serious difficulties are expected for the shipping sector. All the details in the article by Marco Orioles
With the exit of Russian oil from the European market due to the impending sanctions, we will see, explains Reuters , one of the largest reshuffling of energy flows in recent history, with a redirection of millions of barrels to other destinations that will cause serious difficulties for the shipping sector.
The embargo
The ban on imports of Russian oil into the EU will come into force on 5 December, the ban on derivative products on 5 February. The G7 has introduced a price cap which, if it prevents prices from soaring, will continue to make Russian crude accessible to other countries.
The new destinations of Russian oil
According to Vitol CEO Russell Hardy, Russian oil will be redirected to Asia and the Middle East, while, due to changes in global flows, Asian production will move to Europe
Problems for the shipping sector
There will be 2 million barrels a day, plus 1 million barrels of derivatives, to transit from Russia out of Europe, in an effort that, according to Vitol's Global Head of Research, Giovanni Serio, will put a strain on try the shipping sector.
In fact, if the average journey for Russian exports to Europe lasts seven days, the one to reach Asian destinations can reach 21 days. This, observes Serio, corresponds to an increase of about 3% of the shipping activity measured in tons per mile.
Another problem for the sector stems from the lack of Aframax ships needed to load oil from Russian ports. According to Serio, the number of these ships will necessarily have to increase by about 10%, or 70 units.
Further problems will arise from the very sanctions that prevent European shipping companies, insurance companies and financial service providers from getting involved in the Russian oil trade to other regions.
No buyers problem
A final obstacle is that some countries may consider imports of Russian crude oil politically inappropriate.
But a shortage of buyers is not expected anyway. As Triharyo Soesilo, adviser to the Minister of Energy and Mineral Resources of Indonesia, told Reuters , the Indonesian state energy company Pertamina is considering buying oil from Russia and is therefore studying how to adapt this crude to its system. refineries as well as its payment mechanism.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/le-nuove-rotte-del-petrolio-russo-saranno-un-problema-per-lo-shipping/ on Sat, 01 Oct 2022 07:19:12 +0000.