Freight rates for tanker shipments of Russia’s Urals crude to India have surged in August, driven by high vessel demand and increased security risks associated with transporting Russian oil. This rise in shipping costs is putting pressure on Russian oil exporters who are already facing challenges from Western sanctions and geopolitical tensions. Disruptions in global shipping routes, particularly due to conflicts in the Middle East, have further complicated the situation, especially for vessels navigating the Strait of Hormuz.
Rates for Suezmax tankers transporting about 140,000 metric tons of crude from Novorossiysk to India have skyrocketed to nearly $20 million, up from around $13 million last month. Concerns about security in the Black Sea, where drone attacks have impacted port operations, are prompting ship owners to demand higher rates, and many are hesitant to undertake these voyages. Consequently, oil shipments from Russia’s western ports have decreased to approximately 2.3 million barrels per day in early August, 15% below planned levels.
In addition, freight costs for transporting Aframax cargoes from the Baltic port of Primorsk to India have increased to around $13 million, up from $8 million in July. As exporters shift cargoes from the vulnerable Novorossiysk to the Baltic, demand for tankers has intensified, further straining vessel availability. India continues to be a major buyer of Russian crude, absorbing significant volumes redirected from Europe due to sanctions following the Ukraine conflict.
