Asian Countries Intend To Purchase More Russian Oil
The U.S. sanctions against the Chinese company COSCO Dalian Tanker Shipping led to a sharp increase in freight prices and the cost of oil refineries in northeast Asia for the transportation of Middle Eastern oil. According to S&P Global Platts, the transportation cost became 27.29 USD per ton.
The increase in transportation costs is beneficial for Russian oil companies. The oil delivery from Russian ports to northern Asia usually takes a week. This is significantly less than 10-15 days required for the delivery of goods from Southeast Asia and Oceania, and up to 30 days from the ports of the Persian Gulf.
In August, Korea National Oil Corp. paid 63.59 USD per barrel for Russian oil. This is significantly lower than the cost of delivering a barrel from Saudi Arabia (65.22 USD) and Abu Dhabi (67.23 USD). In 2019, South Korea bought almost 22 million barrels of oil in Russia, which amounted to approximately 13% of all oil purchased by the company.
Analysts estimate that the imposition of sanctions against COSCO Dalian reduced the global tanker fleet by 5%. The Chinese company owns 40 VLCC tankers and 17 Long Range tankers. It is not surprising that Asian buyers are hiring tankers from other companies.