By NatalieGrover, Robert Harvey and Ahmad Ghaddar
LONDON, Feb 1 (Reuters) – Tankers carrying Russian oil
have continued sailing through the Red Sea largely uninterrupted
by Houthi attacks on shipping and face lower risks than
competitors, according to shipping executives, analysts and
flows data.
Russia has become more dependent on trade through the Suez
Canal and the Red Sea since it invaded Ukraine, which led to
Europe imposing sanctions on Russian imports and forced Moscow
to export most of its crude to China and India. Before the war,
Russia exported more to Europe.
The number of Russian ships passing through the Red Sea has
registered a slight decline since December, according to oil
analytics firm Vortexa, but traffic last week was still around
20% higher than on average in 2023.
That contrasted to more extensive disruptions overall to oil
tanker sailings through the Red Sea in the past two weeks.
Shipments of diesel and jet fuel from the Middle East and
Asia to Europe – one of the major east-to-west oil trade routes
– nearly came to a halt in the days following the first round of
U.S.-led retaliatory strikes on Yemen on Jan. 11, Vortexa data
show.
Russia has close ties to Iran, which backs the Houthis, and
that may have helped prevent attacks.
Ships carrying Russian oil for the most part have no links
to Israel, the United States or Britain. The Houthis have said
they are targeting ships connected to those countries in attacks
to show solidarity with Palestinians in Gaza.
G7 sanctions on Russia’s oil trade over the Ukraine war
contributed to rapid growth in the shadow fleet of vessels
transporting sanctioned crude and fuel. Those vessels are leased
by companies typically registered outside countries that have
imposed sanctions on Russia. They also use maritime services and
insurance from countries that do not impose sanctions.
With fewer clear connections to Western companies, those
vessels are less likely to be a target.
«Most Russian crude and fuel is transported by the shadow
fleet, so its unlikely going to be in the crosshairs of Houthi
attacks,» said veteran oil trader Adi Imsirovic.
«The Houthis are targeting ships linked to certain
countries.»
Many vessels carrying Russian cargoes are indicating they
are not tied to Israel via signals from automatic identification
systems (AIS) – which publicly broadcast information including a
vessel’s position and destination, Vortexa analyst Mary Melton
said.
Russia, a partner to key Arab powers like Saudi Arabia and
the United Arab Emirates in addition to its ties with Iran, has
condemned what it called the ‘irresponsible’ strikes.
Chinese officials have put pressure on Iran to rein in
attacks on ships in the Red Sea and ensure those attacks do not
hurt Chinese interests, Iranian sources and a diplomat told
Reuters last week.
ATTACK
A Houthi attack late last week on a tanker carrying fuel
which originally loaded in Russia was unlikely to impact wider
Russian trade flows as that specific vessel was targeted because
it had ties to British and American companies, Vortexa’s Melton
said.
«The tanker had ties to both US and UK based corporate
entities, so other vessels carrying Russian cargoes without
these ties do not face a similar risk,» she said.
The attacked tanker Marlin Luanda is owned by Oceonix
Services, a company registered in the UK to a London address,
according to data from another tracking firm Kpler.
Global commodities trader Trafigura, which owned the cargo,
said it was assessing the security risks of further Red Sea
voyages.
Four tankers carrying Russian Urals crude passed through the
Bab-el-Mandab strait with another three heading south through
the Red Sea since the attack on the Trafigura vessel on Jan. 26,
Kpler data show.
The flow of Russian oil should continue provided it makes
economic sense and insurance cover can be procured given the
level of demand from India and China, Ian Wilkinson, VP of sales
excellence at Inchcape Shipping Services told Reuters.
Western tankers, however, will likely re-route away from the
Red Sea and sail around the Cape of Good Hope, said Shefali
Shokeen, a lead shipping analyst with a Dubai-based shipowner.
Either way, shippers are facing higher costs. In the Red
Sea, shipowners are charging higher freight rates and crew fees,
and war risk insurance premiums have surged.
Crew fees have doubled, while war risk premiums now amount
to around 1% of the value of a ship, versus 0.5% about 10 days
ago, excluding discounts, according to industry sources.
For instance, costs to charter 1 million barrel-capacity
Suezmax ships to send Iraqi oil to Mediterranean refineries have
climbed by $2.50-$3.50 a barrel for freight, while insurance has
roughly tripled to between 10 and 15 cents a barrel, according
to a trader with a European refiner.
The alternative route via the Cape of Good Hope adds two to
three weeks to sailing time and an extra 3,300 nautical miles in
fuel consumption, in addition to emissions taxes for those owned
by or calling at EU states.
(Reporting by Natalie Grover, Robert Harvey and Ahmad Ghaddar
in London; Additional reporting by Jonathan Saul and Alex Lawler
in London
Editing by Simon Webb and David Evans)