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Freight rates stall for Asia-bound Russian Urals oil

Freight rates for tankers bring Russia's flagship Urals crude from its Baltic ports to India have actually stalled on expectations of declines in oil exports from Moscow's western ports in November, trading and shipping sources said.

Weaker rates for global standards could increase pressure on Urals freight rates, as FOB costs for the grade listed below the cost cap of $60 per barrel could draw in more Western shipowners to the market, the three sources included.

Urals costs in Russian ports have actually remained listed below the $60 per barrel practically all the time since mid-October, LSEG data shows. << URL-PRMSK >< URL-NVRSK>

> Under the terms of the cap, purchasers can only use Western services such as shipping and insurance when Russian crude trades listed below $60 per barrel.

Freight rates are low and they are not increasing. The cost of a trip (for a 100,000-tonne Urals cargo from Baltic) to India is still around $5.1-$ 5.2 million, one trader stated on condition of privacy.

Freight rates from the Baltic ports of Primorsk or Ust-Luga to ports in western India have risen to $5.5 million this month from multi-month lows around $4.3 million earlier this year.

The expense of a one-way trip from Russia's Baltic ports to India, nevertheless, is still well below the $7.7 million struck in early 2024.

Russia's petroleum exports from its three main western ports will fall by 13% in November from the previous month to 1.95 million barrels daily (bpd) from some 2.25 million in October, following completion of the refinery upkeep season, Reuters sources said recently.

The U.S., other Group of Seven

(source: Reuters)