Comments from shipping broker Gibson on the first five days of new US Administration (Page 1).
Obviously, tariffs on Canada & Mexico, and “Gulf of America” are more important than Russia-Ukraine war. 5 days and counting. If all else fails, tariffs on Russia!!! (That should work, right?)
Filling Strategic Petroleum Reserves (SPR): Let’s wait and see how this is supposed to work
Last week’s VLCC bounce proved to be a short-term blip. Rates on the most used VLCC tanker route (TD3) jumped to $59K before returning to $31K daily. Then again, it could be a steady build to the typical (the typical is VLCC rates (favored route) > Suezmax rate (favored TD20 route) > Aframax rate (TD 25, not the usual)
As an owner of some tanker names, post-blip rates not fantastic. But owners not desperate.
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On a separate but related energy note, Venture Global (VG) started trading on the NYSE today (01/24/25). Venture Global own multiple LNG sites in the Louisiana area [Edit: Venture Global own LNG infrastructure, which includes pipelines and multiple liquefaction facilities to produce LNG in Louisiana]
Many of the vessels, specialized tankers, and shuttle tankers transporting Russia’s oil from the Arctic and Far East Pacific fields and production clusters to Asia have now been sanctioned. This put around 1.5 million bpd of Russia’s crude flows from its Pacific and Arctic ports at risk, according to a Bloomberg analysis of the tankers now designated by the U.S.
Some 70% of the oil tankers that Russia used to ship crude from Kozmino have been slapped with sanctions, per Bloomberg’s estimates.
This has likely prompted Moscow and the traders it works with to withdraw tankers servicing the western Russian ports of Primorsk, Ust-Luga, and Novorossiysk and redeploy them on the Far East-China routes.
The freight rates for shipping ESPO crude on the Kozmino-East China route have tripled since the U.S. sanctions were announced on January 10.
At least two oil tankers that previously transported Russian crude from the western ports are now on the Kozmino-China route, according to the vessel-tracking data Bloomberg has compiled. Both these tankers are owned by companies based in Hong Kong, but it is unknown whether the ultimate owners are Russian.
@DrBob2 - The freight rate is tripling, not the price of the cargo. Also, Kozmino - East China is a short run.
A good deal for the vessel owner (if 50 - 100% Russian owned, Russia still benefits)
Biggest cost is usually fuel consumption. But with a short run, the vessel probably doesn’t need full bunker to cover trip. Not too comfortable with the bunker side, but I would guess $1.2M - $1.5M on the fuel side, and $200k - $300k for the vessel hire.