Sanctions on Russia send super-tanker rates soaring to all-time highs — Bloomberg
Photo: Supertanker rental prices hit record highs amid sanctions against Russia (Getty Images)
Rental prices for oil supertankers have risen to their highest level in more than five years. Buyers sought alternatives to sanctioned Russian oil amid increased supplies from producers in the Middle East and the US, Bloomberg reports.
Base rates for huge crude carriers, which can transport up to 2 million barrels from the Middle East to China, rose to nearly $137,000 per day at the end of last week, representing a 576% increase this year.
This was the highest figure since the end of April 2020 and exceeded the last multi-year peak reached just two weeks ago. A broader index covering VLCC rates on several routes also reached $116,400 per day, a new five-year high.
The surge in supertanker bookings came as US sanctions on oil exports by Russia's Rosneft and Lukoil took effect on Friday, forcing buyers, particularly in India and China, to seek alternative suppliers.
This also coincided with increased production in the US and OPEC+ countries, particularly producers in the Middle East, who are ready to supply buyers with more crude oil.
Also, earlier this month, a record number of tankers that usually carry products such as jet fuel and diesel fuel switched to transporting crude oil — a process known as dirtying — to make more profit.
Sanctions against Rosneft and Lukoil
In October, the US approved new sanctions against Russia. The restrictions affected two oil giants, Rosneft and Lukoil.
As a result, other countries were forced to reduce their purchases of oil from Russia and cease cooperation with its oil companies.
US President Donald Trump recently announced that Indian Prime Minister Narendra Modi has almost completely refused to buy oil from Russia.
The Bulgarian government has decided to nationalize the Lukoil oil refinery on its territory in order to sell it to other owners.
