Geopolitics

More Western tankers are jumping into the Russian trade — legally, under the price cap — to pocket big freight premiums.

Worsening China-U.S. relations underscore how pivotal geopolitics has become to global shipping and trade.

Larger crude tankers are moving more U.S. exports on shorter voyages to Europe as long-haul volumes to China stagnate.

After a year of sanctions and “self sanctions,” shipping cargoes caught in the crossfire continue to find their way to buyers.

Sanctions have split the world’s tanker fleet in two. On one side, those that follow Western rules; on the other, those that don’t.

Russian crude restrictions are having the predicted effect on tanker trades, soaking up more vessel capacity as sailing distance lengthens.

Sanctions on Russian crude exports have yet to boost tanker rates. Some question whether sanctions on Russian diesel will either.

The predicted boost to tanker rates from Russian crude disruptions has yet to materialize. Instead, rates have declined.

Even if no oil moves under price caps, Russian exports could face deep discounts and continue to flow via “shadow tankers.”

Global energy trades face even more tumult ahead. “This could get crazy,” says Scorpio Tankers’ Robert Bugbee.

Europe must replace all seaborne crude imports from Russia within the next few weeks. Crude tanker owners stand to gain.

Product-tanker share prices are up triple digits year to date as investors position for sanctions upside.

Supply chain planners will walk a precarious path in 2023, according to S&P Global transportation expert Paul Bingham.

The EU is going to ban imports of Russian crude and petroleum products. It still has a long way to go to find replacement supplies.

The G-7 plan to squeeze Russia’s oil profits hinges on the EU revising its own sanctions. Those revisions face opposition.

“Right now, shipping companies around the world are looking at this and scratching their heads,” says sanctions expert Bruce Paulsen.

The Russia-Ukraine war caused demand for LNG to surge. Owners of LNG carriers are in prime position to profit this winter.

It looks increasingly likely that war-driven changes to global crude flows will persist for an extended period.

Chinese military exercises in the Taiwan Strait will delay shipments. Further escalation could have dramatic supply chain effects.

EU sanctions on Russian petroleum exports could have much more serious repercussions than earlier U.S. moves.