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Sources say that the freight rates for Russia's Urals are weakened due to an oversupply of tons.

Sources in shipping and trade said that freight rates for tanker shipments from Russia's western port to India dropped in mid-May because of seasonal factors, a large supply?of shadow flotte vessels and global shifts in shipping.

The blockade of Strait of Hormuz is still in place. Meanwhile, the shift of tankers to the Atlantic has a negative impact on the rates in Europe as ships who previously worked in the Gulf relocate.

Lower freight rates support higher netbacks of Russian?oil imports. Estimates suggest that the latest reduction in freight rates could boost?Urals price by $3 to $7 per barrel on a FOB basis.

The demand for Urals remains high in India, its largest market, despite the fact that U.S. The restart of the Nayara refining plant after maintenance and waivers are two examples. Washington extended a 30-day waiver of sanctions on May 18, allowing the purchase of Russian oil that is already in sea to help energy-vulnerable nations affected by the Iran conflict.

Sources claim that the cost to ship Aframax cargoes to India from Primorsk has dropped to $13 million. This is a significant drop compared to late April and early May when it was more than 18 million dollars.

The freight?for Suezmax?tankers travelling the same route is about $16million per voyage.

Costs of shipping Urals from the Black Sea port Novorossiisk, to India on Suezmax tanks have dropped to $18million. They were previously $20-21million. According to traders, LSEG, and calculations, the export and transit of oil from?Russian's western port increased?by about 150,000 barrels a day or 9% in the first two week of May compared with April. (Reporting and editing by Kirsten Doovan)

(source: Reuters)