Russia Oil Turmoil Seen Driving Tanker Market Higher

• Tough new sanctions on Russian oil shipments taking effect from December are likely to boost already high tanker rates as buyers race to replace cargoes and are forced to use longer routes, a leading ship manager said.
• In the latest action against Russia in response to its invasion of Ukraine that began in February, the European Union will ban Russian crude imports from Dec 5, and Russian oil products from Feb 5.
• Designed to deprive Moscow of revenues that could finance its action in Ukraine, the measures will force one of the world's top oil producers and exporters to seek alternative buyers further afield.
• Maersk Tankers Chief Executive Christian M. Ingerslev told Reuters he expected demand to be healthy as Russian oil continues to flow but to different markets.
• "With new sanctions coming into place, we expect that Russian oil will continue to be moved. But now the importing countries will not have the short haul distance, it will be a long haul," he said.
• Freight rates have hit record highs in recent weeks and analysts expect them to stay supported for both crude and oil products tankers, potentially driving inflation that has hit multi-decade highs. Ingerslev said the conditions had prompted ship owners from other segments such as dry bulk to invest in tanker assets.

(Source: Reuters)