TANKER freight rates could double in 2023 due to inflation and increasing distances to transport oil from sanctions on Russian barrels, reports London's S&P Global Platts.
Time charter equivalent rates are currently around US$33,000/day in freight forward markets.
Global Platts assessed Clean Arab Gulf-UK Continent 75,000 lumpsum freight at $5,000 on January 11, down from $6,600 on November 29, but up from $2,000 on January 11, 2022.
Most of this depends on a looming EU ban on Russian oil product imports and the accompanying price cap.
"It comes down to how the clean [oil product] embargo is enacted and how the clean freight is redirected," said Euronav NV fuel procurement head Rustin Edwards.
The EU prohibited imports of Russian crude oil December 5 and prohibited Russian oil product imports from February 5, unless barrels comply with a G7 price cap.
The move is part of a slew of international sanctions in response to Russia's war in Ukraine.
It means Europe must source products such as diesel, jet fuel, and naphtha from further afield, while Russia must also seek further flung markets to send its products.
"You might see some transition from dirty large tonnage to clean large tonnage," said Mr Edwards.
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