The cost of transporting Russian oil from Novorossiysk has reached historical highs

The cost of transporting Russian oil shipments from the port of Novorossiysk for the week from August 31 to September 6 increased to historical highs. Kommersant reports this with reference to a review by the Price Index Center (PCI).

Deliveries to Western India by Aframax tanker rose in price by 2.7 percent, to $23.3 per barrel, and to Northern China by 3.1 percent, to $25.7. Rates increased for the seventh week in a row.

According to analysts, the growth is associated with increased shipping risks, increased insurance costs and a decrease in the number of owners willing to send ships to the Black Sea. Against this background, transportation of raw materials from Novorossiysk to Turkey also increased in price by 2.2 percent, to $12.8 per barrel.

According to Reuters, since the beginning of September, the cost of transporting a shipment of the main Russian export grade of Urals oil from Novorossiysk to India has remained at the level of $18-20 million per flight.

Russian oil supplies from Baltic ports are also becoming more expensive. Thus, freight of an Aframax tanker to Eastern India will cost $17.2 per barrel, which is 3.7 percent more expensive than a week earlier. As the Center for Information Center notes, there is no shortage of vessels in the Baltic, however, given the readiness of buyers from India to take free shipments from the port of Primorsk, if free volumes appear there, rental may continue to grow.

Andrey Polishchuk, senior analyst for the oil, gas and transport sectors at Euler, notes that even with record high supplies, the profitability of Russian oil exports is growing, as the rise in prices for the benchmark Brent grade compensates for all the problems. However, NEFT Research Managing Partner Sergei Frolov recalls that logistics restrictions in the Black Sea remain a problem that reduces sales revenue.