Russian oil is transported to Asia in Chinese supertankers due to a shortage of ships.
China, the world’s biggest oil importer, has continued to buy Russian oil despite Western sanctions after Russian President Vladimir Putin and Chinese leader Xi Jinping launched what they call a borderless pre-war partnership in Ukraine.
A fifth supertanker, or very large crude carrier (VLCC), is carrying crude to India and continues to buy Russian oil at a discount, as does China, with many Western buyers turning to other suppliers, the sources said.
Five expeditions are scheduled between December 22 and January 23, according to Eiko’s sources and ship tracking data.
The G7 price cap, introduced in December, allows countries outside the European Union to import Russian oil by sea, but bans shipping, insurance and reinsurance companies from transporting Russian crude unless it is sold for less than $60.
“Since Ural prices are much lower than the ceiling, Urals buying and trading activities are mostly legal,” said the head of a Chinese company involved in transportation.
As the United States and its allies seek to stifle Moscow’s energy revenues to limit its ability to finance its war in Ukraine, Russia has shifted its oil exports rapidly from Europe to Asia over the past year.
Longer voyages, steep discounts and record freight rates have wiped out gains, but the use of supertankers on Asian routes may now reduce shipping costs.
Russia’s energy and transport ministers declined to comment. Although Beijing has previously called Western sanctions against Russia illegal, the Chinese Foreign Ministry did not respond to a request for comment.
India’s oil minister Hardeep Singh Puri said in a press briefing on Thursday where India can buy oil at the lowest price.
According to industry sources, Indian refineries are getting a discount of $15-20 per barrel on Russian oil compared to Brent.
RUSSIA LOOKS TO ASIA
Russia is sending the Urals from its western ports to carry supertankers Lauren II, Monica S, Catalina 7 and Natalina 7, all Panamanian-flagged vessels are bound for China, and Sao Paulo is already approaching Russia. India, according to three trade sources and Eikon data.
According to Eikon data and public marine databases, Lauren II is operated by Chinese company Greetee Co Ltd and owned by Chinese company Maisie Ltd, Catalina 7 by Hong Kong company Canes Venatici Ltd and Natalina 7 Hong. Kong’s company is Astrid Menks Ltd, both controlled by China’s Runne Co Ltd, while Monica S is owned by China’s Gabrielle Ltd and controlled by Derecttor Co Ltd. Sao Paulo is owned and operated by Cyprus-based Rotimo Holdings Ltd.
Reuters could not immediately contact the owners and managers because they are not publicly available.
The head of a Chinese shipping company estimated that a total of 18 Chinese supertankers and 16 Aframax-sized vessels could be used to transport Russian crude in 2023, which would be enough to transport 15 million tons a year, or about 10% of oil production. Total export of the Urals.
A VLCC can carry up to 2 million barrels, a Suezmax vessel up to 1 million barrels and an Aframax up to 0.6 million barrels.
While most Russian crude is now shipped to China, India and Turkey by Russian or non-Western vessels, G7 sanctions have resulted in a shortage of small ice-class tankers owned by many Greek companies and Norwegian companies that Russia is supposed to transport. its crude oil is bought from Baltic sea ports in winter.
Russia and China do not have large fleets of ice-class vessels, and the use of Chinese VLCCs allows them to carry out ship-to-ship transfers from Baltic ports to larger tankers in international markets, according to traders.
The experience emerged in Eiko’s tracking data, including in international Mediterranean waters, highlighting executive operations near the autonomous Spanish city of Ceuta on the north coast of Africa and the city of Kalamata on Greece’s southern Ploponnese peninsula.
“It’s extremely expensive and it doesn’t make sense to use ice-class tankers for long distances,” a European market trader explained why VLCCs are being used.
Another trader said the war in Ukraine and sanctions had boosted demand for smaller tankers and lowered prices for larger ships, helping to offset some of the additional costs Russia faces.
