May 16, 2023
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Russia has successfully managed to keep the country’s oil moving to markets of the world, defying the fears that sanctions levied last month would result in a plunge in the country’s exports, the Wall Street Journal (WSJ) reported.
Gatik Ship Management is one of the most active of the upstart firms that have reportedly snapped up ageing oil tankers to replace Western-owned vessels that are no longer dealing with Russia, the Journal mentioned.
That parallel fleet is aiding Moscow in fetching crude to its buyers in Asia, per shipping executives, vessel-tracking, brokers, insurance, and ownership data, WSJ stated.
The shipping market has always been able to cope with political change, explained Lars Barstad, the CEO of tanker owner Frontline.
An EU oil embargo and a US-led price cap have reportedly upended how Russia gets the oil to markets. The price cap forbids Western insurers and shippers from dealing with Russia’s crude that trades above USD 60 a barrel, per the Wall Street Journal.
Several tanker owners have decided to keep away from Russia’s market. Russian oil sells primarily to purchasers in Asia, needing longer sailings than Europe.
The Journal reported that the resiliency of Russia’s oil exports suggests that the price cap has been working as it was meant to, preventing a massive surge in oil rates from the European embargo while further complicating Moscow’s capability to make top dollar on exports.
Besides, the Global benchmark Brent is currently trading at about USD 87 per barrel, not far above where it was when the sanctions started being implemented on 5 December.
References: Wall Street Journal, Livemint
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