The fall in Russian crude prices below the price cap has attracted Western shipping and insurance companies to the market. Without fear of violating sanctions, they have also helped fill the hole left by the Biden administration’s blacklisting of nearly 200 shadow fleet tankers in January.
About a third of all Urals crude cargoes have left Russian ports on Western tankers in the past three months, according to vessel ownership and tracking data compiled by Bloomberg. That’s the highest since the fall of 2023, when the U.S. Treasury Department first imposed sanctions on ships violating the price cap. The share of Western tankers fell to a low of 6% in June 2024, then rose to about 20% at the end of last year and the beginning of this year.
Western insurers, who are only allowed to provide services to ships that export oil sold for no more than $60 per barrel (at this level, the US and EU have set a price ceiling), have also become more active. Their share also amounted to about a third, since they usually insure ships owned by Western companies, Bloomberg notes.
Western carriers responded very quickly to the changing market situation. In April, when Brent oil collapsed from about $75 to $60 per barrel (and Urals, accordingly, fell to $50 and even lower), the share of Western tankers amounted to a maximum of 35% this year.
An additional factor was the shortage of tankers on Russian routes after the Biden administration imposed sanctions on about 180 shadow fleet vessels carrying oil from the Arctic and the Far East in January before leaving the White House. Some of the Russia-linked ships have been diverted from western to eastern routes, making room for foreign vessels, said Mary Melton, senior shipping analyst at Vortexa.
“Since February and March, we have seen a noticeable increase in Russian crude shipments on western Aframax and Suezmax vessels from Russian ports in the Baltic and Black Seas,” said Svetlana Lobacheva, chief analyst at London-based shipbroker E.A. Gibson Shipbrokers. The key factors, she said, were buyer preferences (Indian refineries, for example, clearly did not want to deal with sanctioned vessels) and a drop in Russian oil prices below the ceiling.
About a third of all Urals crude cargoes have left Russian ports on Western tankers in the past three months, according to vessel ownership and tracking data compiled by Bloomberg. That’s the highest since the fall of 2023, when the U.S. Treasury Department first imposed sanctions on ships violating the price cap. The share of Western tankers fell to a low of 6% in June 2024, then rose to about 20% at the end of last year and the beginning of this year.
Western insurers, who are only allowed to provide services to ships that export oil sold for no more than $60 per barrel (at this level, the US and EU have set a price ceiling), have also become more active. Their share also amounted to about a third, since they usually insure ships owned by Western companies, Bloomberg notes.
Western carriers responded very quickly to the changing market situation. In April, when Brent oil collapsed from about $75 to $60 per barrel (and Urals, accordingly, fell to $50 and even lower), the share of Western tankers amounted to a maximum of 35% this year.
An additional factor was the shortage of tankers on Russian routes after the Biden administration imposed sanctions on about 180 shadow fleet vessels carrying oil from the Arctic and the Far East in January before leaving the White House. Some of the Russia-linked ships have been diverted from western to eastern routes, making room for foreign vessels, said Mary Melton, senior shipping analyst at Vortexa.
“Since February and March, we have seen a noticeable increase in Russian crude shipments on western Aframax and Suezmax vessels from Russian ports in the Baltic and Black Seas,” said Svetlana Lobacheva, chief analyst at London-based shipbroker E.A. Gibson Shipbrokers. The key factors, she said, were buyer preferences (Indian refineries, for example, clearly did not want to deal with sanctioned vessels) and a drop in Russian oil prices below the ceiling.
