European oil tanker prices rise to a record high in April - Energy

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Oil tanker prices in Europe rose to record levels last April, with geopolitical uncertainty linked to the Russian invasion of Ukraine and rising bunker fuel prices.

According to a report issued by the US Energy Information Administration, on Wednesday, the prices of Aframax crude tankers in the Black Sea in southeastern Europe rose to $ 32.10 per metric ton last month, three times the price recorded in January at $ 10.11 per ton.

The prices of crude oil tankers through the Baltic Sea in northern Europe also increased to $41.38 per tonne in April, up from $7.50 per ton during the first month of 2022.

oil tanker prices

The rise in oil tanker prices through the Black Sea comes due to insurance risks, as the Black Sea is located on the border with Ukraine and Russia.

Tanker rates at the Russian Baltic port of Primorsk have also increased, with smaller Aframax ships in demand on routes sailing from Russian ports to China.

Under normal conditions, VLCCs are used to transport Russian Urals crude to China.

With the supply of Aframax tankers in short supply, the price of crude carriers via the Baltic and UK route rose from $8.53 a tonne in January to $41.38 last month.

Oil tankersSanctions on Russia’s energy and shipping sectors prompted European buyers to buy crude oil from other markets.

As a result, weekly US crude oil exports have been above the 5-year average, since the week ending April 15th.

In the week ending May 20, total US oil exports rose by 821,000 barrels per day, to reach 4.341 million barrels per day.

Increase in bunker fuel prices

Increased bunker fuel or marine fuel costs negatively affect all oil tanker prices, given sulfur levels in the fuel.

During the period between January and April 2022, the prices of high-sulfur bunker fuel increased by 28%, and the prices of low-sulfur fuel increased by about 33%.

The International Maritime Organization (IMO) regulations for 2020, set the sulfur content in marine fuels at 0.5%, compared to the previous limit of 3.5%.

The current price premium for low-sulfur fuel compared to high-sulfur fuel rose to $276 per tonne last March, the highest monthly difference since January 2020.

Shipowners can install a scrubber (costing between $2 million and $6 million), which allows the ship to use cheaper high-sulfur fuel; To avoid paying a premium for low-sulfur fuels.

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