Freight rates are soaring as crude buyers struggle to find shippers willing to send their vessels into Russian ports because of the shelling in and around Ukraine.
The rate to book an Aframax vessel to load at one of Russia’s Baltic Sea ports to western Europe almost tripled on Thursday from the previous day, according to traders and shipbrokers. The bulk of Russia’s flagship Urals crude that loads in the northern European ports is usually sold to western buyers, although they sometimes go into China and India.
On Thursday, freight rates for cargoes from the Persian Gulf to the U.S. Gulf coast rose 12% from a day earlier. Middle East cargoes are likely to benefit further as an alternative that avoids the conflict zone around the Black Sea, according to the traders.