“Billions of barrels of oil are accumulating on tankers in the oceans, indicating tensions due to sanctions – BloombergA significant portion of the increase in oil volume on tankers since late August comes from sanctioned countries. This indicates disruptions in oil trade and threatens the revenues of sanctioned oil-producing states.
”, — write: unn.ua
DetailsAccording to vessel tracking data from Vortexa, Kpler, and OilX, approximately 40% of the increase in oil volume on tankers since late August comes from barrels from Russia, Iran, Venezuela, or oil of unclear origin. Even the lowest estimate, around 20%, represents a larger share of global oil production than these three countries have, the publication writes.
The accumulation does not mean that the barrels will never be sold, but it threatens the revenues of sanctioned oil states and has further implications for the global oil market, which is projected to move towards an oversupply. While the growth partly reflects increased production, it also indicates some shipping problems. At the same time, there has been a sharp increase in unauthorized shipments, the publication writes.
The fate of all this oil transported by sea, regardless of whether it has been affected by sanctions or not, will largely influence how oil prices move over the next few months, traders said. Caution regarding the latest Western measures is provoking some regrouping of oil flows, causing repercussions for major importers such as India and China, while the overloaded tanker fleet has briefly increased daily transportation costs by more than $100,000, the publication notes.
“Part of this increase is due to tightening Western sanctions, which have left Russian oil stranded on ships and unable to be unloaded,” wrote Clarksons Securities analysts, including Frode Mørkedal. “Previous buyers have purchased replacements in the Middle East and the Atlantic.”
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According to Bloomberg’s analysis based on data from vessel tracking companies, Russian supplies are the main reason for the increase in oil supply due to restrictions.
The volume of Russian seaborne supplies has increased in recent weeks as the country has ramped up oil production as part of unwinding previously agreed production cuts with partners in the OPEC+ group of oil-producing countries, the publication writes. It is likely that some of the oil is being redirected to export terminals as a result of attacks on Russia’s oil infrastructure, particularly refineries, the publication notes.
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Meanwhile, unprecedented Western pressure on buyers of Russian barrels is leading to the halt of some oil shipments, with Indian refineries, in particular, refraining from acceptance, suggesting that China may be unwilling to make up the shortfall, the publication writes. US sanctions against Russia’s two largest oil companies, PJSC Rosneft and PJSC Lukoil, have further complicated trade in their oil.
According to Bloomberg calculations based on Ministry of Finance data, tax revenues to Russia’s oil sector last month fell by more than 24% year-on-year. The Russian government already expects oil and gas revenues to the budget this year to be the lowest since the 2020 pandemic.
Iranian supplies have also surged, reaching their highest level in seven years in October, the same month the US sanctioned a major Chinese terminal for its role in buying barrels used to finance the Islamic regime.
Of course, there is also a large amount of unsanctioned oil in tankers at sea, as global production increases. OilX data shows that Saudi Arabia made the largest contribution to the increase since late August, followed by the US and Russia.
Last month, the kingdom shipped oil abroad at its fastest pace in two and a half years, continuing to regain market share lost during years of production restrictions by the Organization of the Petroleum Exporting Countries and its allies.
OPEC+ led by Saudi Arabia increases production despite falling oil prices – FT03.05.25, 15:51 • 10375 views