On January 10, the United States Treasury sanctioned 161 oil companies for its role in the transfer of Russian oil. It was part of a series of measures against Moscow imposed by the outgoing Biden administration that President Donald Trump has not yet increased. In fact, there seems to be a possibility that it is even harder before any peace conversation in Ukraine.

The cost of finding an oil tanker to bring Russia’s flagship oil to Asia has already increased by almost 50% since the measures were introduced, according to Argus Media data. The gap between prices when barrels leave Russia and arrive in Asia, an indicator of delivery costs, has also shot.

While such waves occurred in the past, there were reasons at that time to distrust how real they were. For example, inflating delivery costs would have been an intelligent way to make it look for exported loads costing $ 60 per barrel or less, even if the sale price when delivering to Asia was higher.

To do that would have described the loads to access Western services, including oil and insurance, while allowing barrels to be sold well above a group of seven prices.

There is no way to demonstrate that this type of exaggeration of freight rates happened or did not happen. There was simply a financial incentive to do so. Similarly, today there is no way to demonstrate or refute that the same is not happening. In fact, the same incentive to play numbers still exists.

What has changed is the vast oil fleet now under sanction, and the signs that the newly listed in the black list begin to interrupt, as well as those placed under previous measures also fought for employment. It is very possible that the real freight costs of Russia are really about spiral.

There are now 265 oil tankers in the blacklist at least one of the United States, the EU or the United Kingdom (with a list of the United States, the most harmful to trade). The previous US measures in general prevented the target ships from being negotiated.

The measures hit the transporters of refined products, as well as those that transport raw.

Even so, of 435 ships that carried the Russian crude in 2024, 112 of them, or 26%, are now subject to sanctions imposed by Washington. Add those attacked by London and Brussels and the proportion increases to 37%.

But that underestimates the problem facing Kremlin. With 80% making repeated loads (and some of up to 20), the oil tankers sanctioned by the United States transported 45% of all shipments of Russian marine crude last year. Add the ships beaten by the union of the United Kingdom and Europe, but not in the United States, and 57% of raw moscow shipments were transported in boats that are now on the blacklist.

And even that may not be enough. Some oil tankers designated to move the Iranian oil, including two on Thursday, had also transported Russian barrels.

These types of numbers represent a hole in the shadow fleet of the oil tankers that Russia gathered to move its oil and make it imperative to find alternative vessels.

To be clear, Russia has so far worked a large extent in the previous sanctions and has stable its vast export program. It is this huge volume of oil for which you need to find tankers.

The net result is an increase in load invoices that may be starting, especially if other owners, previously cold for trade, need additional incentives to risk failing future sanctions. It is also likely to be more expensive to acquire the next lot of ships to complement the shadow fleet and fill the hole created by the sanctions.

In fact, the idea of ​​buying second -hand ships to solve the problem is questionable. If you are an intermediary who considers working with Russia, or even in Russia, what is the point of spending billions of dollars or dirhams in second -hand oil tankers, just to see them sanctioned?

When the ‘propagation of delivery’ and the freight costs increased previously, there was nothing close to the type of restriction in the supply of oil companies that Russia faces today.

The apparent market freight bills in the Russia market are already punishing, at $ 10 per barrel from the Black Sea to India and up to $ 13 from the Baltic, according to Argus.

That is not yet at the level that reached in the weeks immediately after the introduction of the price limit, when the Baltic trip to India costs more than $ 20 per barrel, but has increased by $ 4.20 per barrel, or 48% , since January 10.

It is important to note that some sanctioned ships are no longer in delivery efficiently. Several of the blacks who remain in use are sitting out of the Russian Costa, or outside the ports of China, where they are supposed to download, others are discharged in larger vessels near Russia for storage.

Some are on their way to their destinations and it will be interesting to see what they do once they have delivered.

Sanctioned ships can provide a source of possible storage ships, but the potential for future fleet reduction is clear. It is also questionable if the owners of boats that are not on the blacklist will be willing to collect loads of those who are.

If this type of interruption occurs at the scale, with the significant number of additional shadow fleet ships that were sanctioned, Russian freight challenges could become paralyzing.

And history shows that this is a very real possibility.

Note: Julian Lee is an oil strategist who writes for Bloomberg. The observations they make are yours and are not intended as investment advice.

Photography: The Seamusic tank truck docked at the Rosenets oil terminal near Burgas, Bulgaria, on Wednesday, March 13, 2024. Photo credit: Michaela Vatcheva/Bloomberg

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Topics Russian energy oil gas