tanker

The cost of renting oil supertankers on key routes has surged to its highest level in more than five years. The driver of growth has been the search by buyers for alternatives to sanctioned Russian oil against the backdrop of increased supply from producers in the Middle East and the USA, reports Bloomberg.

By the end of last week, the basic freight rates for VLCC (Very Large Crude Carriers) supertankers, capable of carrying up to 2 million barrels, on the Middle East — China route had risen to nearly $137,000 per day. This is 576% higher than the figures at the beginning of the year. The current price is the highest since the end of April 2020.

The sharp spike in bookings coincided with the implementation of US sanctions against the oil exports of Russian companies PJSC "Rosneft" and PJSC "Lukoil" that came into effect on Friday. This forced buyers — especially in India and China — to urgently redirect to other suppliers.

The situation has coincided with an increase in production in the USA and OPEC+ countries. According to Jefferies LLC analyst Omar Nokta, producers in the Middle East are ready to provide the necessary volumes.

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