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27 Jan, 2023 16:31

Russian oil transfers at sea surge as freight costs rise – Bloomberg

A record 14 million barrels of seaborne oil have been reloaded this month and sent to Asia, the news agency reports
Russian oil transfers at sea surge as freight costs rise – Bloomberg

Ship-to-ship (STS) transfers of Russian crude oil have reached record volumes since the start of January amid rising freight costs from EU sanctions, Bloomberg has reported citing tracking data.

STS transfers are a routine part of oil trading and are commonly used to move crude or petroleum products from large-capacity vessels to smaller tankers at sea.

So far, five very large crude carriers (VLCCs), the industry’s largest mainstream vessels, are likely to have been involved in Urals STS transfers, the news agency said.

A total of 19 million barrels of Russian flagship Urals oil may have been transferred in December and January, according to tracking data. This month alone, STS operations could hit a record 14 million barrels.

Transfers at sea have turned out to be a more efficient way of delivering Russian oil to consumers following a Western embargo on crude exports from the sanctioned country.

A ban on Russian seaborne oil, along with a price cap of $60 per barrel, was introduced by the EU, G7 nations and Australia on December 5. Another embargo banning almost all imports of Russian oil products kicks in on February 5.

The measures have pushed up freight costs, including insurance, and led to a shortage of ships. Meanwhile vessels involved in STS operations at sea are allowed to use standard insurance if oil on board is sold at or below $60.

Hotspots for ship-to-ship transfers are locations such as the Spanish autonomous city of Ceuta on the north coast of Africa, and the Greek port of Kalamata. Satellite tracking data shows that most Russian Urals crude has been transferred in Ceuta to be transported to Asia.

For more stories on economy & finance visit RT's business section

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