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Russian Urals oil suppliers resume ship-to-ship operations in Mediterranean -data, traders

Russian oil suppliers have resumed Urals ship-to-ship (STS) operations in the Mediterranean after a six-month pause, data showed, trying to address tanker shortages, traders said.

Bad weather and security risks in the Red Sea have made round-trip voyages for tankers carrying Russian oil longer and exacerbated an already tight fleet market, traders said.

Urals oil, Russia’s flagship export blend loaded from its western ports, is mostly supplied to Asia due to a European Union embargo on Russian oil.

At the end of January Djibouti-flagged Ligera, a VLCC (very large crude carrier), was able to load around 2 million barrels of Urals oil in a ship-to-ship operation near Greece’s Kalamata port, according to LSEG and Vortexa data. The vessel is currently showing Caribbean waters as its destination, according to LSEG data, but one of the traders said it was headed to Asia.

Another vessel, Gabon-flagged Marathon, reloaded some 700,000 barrels of Urals oil onto the Panama-flagged Ping An tanker also near Kalamata port on Jan. 25 for delivery to China, according to Kpler data.

Russian oil exporters stopped STS operations last summer after freight rates eased, making reloading to bigger vessels uneconomical.

Traders expected more oil tankers loaded from Russia to do STS in February as rising risks in the Red Sea and tough weather conditions will make it necessary for more charterers.

“Weather issues mean a longer time for passing the Turkish straits, while ice class vessels are needed in the Baltics, so many choose to do transshipment to keep vessels in the region,” a trader in Russian oil market said.

Freight rates for Urals oil shipping remain quite steady, but high, at around $8 million for a one-way trip from Baltic ports to India’s west coast if going via the Suez channel, traders said.

Availability of ice class vessels able to load oil from Russian Baltic ports during winter is also tight as most Western shipping firms that have ample availability of such vessels quit the market.
Source: Reuters (Reporting by Muyu Xu in Singapore and Reuters reporters in Moscow; Editing by Susan Fenton)

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