Russian oil freight rates rise for 12 consecutive weeks

Freight rates for Russian oil carried by Suezmax tankers have risen for 12 straight weeks, Kommersant reported, citing the Centre for Price Indices.

At the beginning of October, rates increased by $0.26 per barrel on every route monitored by the centre. Euler analyst Andrey Polishchuk estimated that transport from western Russian ports to India had become about $8 per barrel more expensive over recent months.

Analysts linked the increase to a shortage of available tankers and security problems affecting shipping. According to an Argus review cited by the newspaper, global VLCC freight rates doubled in September to $15 per barrel.

Viktoria Trifonova of Yakov and Partners said traders were increasingly using smaller vessels, pushing up rates in those segments too. Higher marine fuel prices and longer voyages to India and China were additional pressures.

The increase has not been matched by a proportional widening of Russia’s oil discount. The report said Urals traded at a $3.70-per-barrel premium on India’s west coast in September, allowing traders to offset part of their higher transport costs.