Tankers set to profit further from G7 and EU action against Russia

Last week saw the G7 group of countries – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – announce their intention to impose a globally recognised price cap on Russian oil exports

December 5 will see the European Union ban on Russian imports come into effect too, something with added importance following the G7’s latest measures against Russia.

Most likely, Lorentzen predicted this will come on top of a majority of P&I clubs already pulling insurance for such trade, relegating seaborne trade of oil out of Russia to new parties more unbeknown to the market.

The G7 action could potentially accelerate the shipping of more Russian crude from western terminals on the Baltic and Black Sea to east of Suez markets

It could also accelerate the shift of Russian refined products away from Europe to the non-OECD, BRS added, which again will add ton miles across the whole clean tanker segment.

“All told, this suggests that ton mile demand will remain supported for as long as the Ukrainian conflict persists,” BRS stated in its latest weekly tanker report.

Europe still imports almost 2m barrels per day of crude oil from Russia, down 20% from the 12 months prior to the conflict, according to Poten data.

“The tanker market is in for a wild ride,” Poten concluded. Year-to-date dirty tanker tonne miles have on average been 5.1% higher than the 2021 full-year average, whereas clean tanker tonne miles are up 2.9%, according to analysis from BIMCO.

BIMCO is estimating demand growth to approach 5% in 2022 and 2023 for both markets.

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