Tanker freight rates have soared after Russia’s invasion of Ukraine.

The Baltic Dirty Tanker Index, which measures the cost of moving crude oil, added 416 points on Thursday and Friday, to close the week at 1,147 points, the highest since May 2020.

“The fallout for Russian loading cargoes was eventually felt … as owners asked huge premiums to take the risk both physically and reputationally,” Gibson Shipbrokers said in a note to clients.

Brokers told The Wall Street Journal that daily freight rates for medium-sized Aframax tankers lept by $13,971 on Friday to $43,671 per day. They said shipowners willing to take the risk to move Russian oil are enjoying huge premiums, while buyers are seeing discounted prices.

“The number of companies willing to trade and transport Russian commodities has already declined regardless of the legal ramifications,” Gibson said. “Many large companies, particularly those who are public, will not want to be seen supporting the Russian economy.”

A Singapore broker, who arranges Russian oil cargoes, said there is concern that as the conflict intensifies, the U.S. and Europe may impose sanctions on Russia’s energy exports and trigger a scramble to find alternative supplies.

“The question is if scheduled sailings to Russia to load oil might be canceled,” the broker said. “Right now there is a lot of uncertainty and freight rates may well continue climbing.”

Brokers said Russian oil buyers are facing problems finding tankers willing to sail to the Black Sea and are struggling to get credit guarantees from Western banks.

Greece, which operates up to a quarter of the global tanker fleet, is urging shipowners to pull their vessels from Russian and Ukrainian waters in the Black Sea.
Source: Wall Street Journal