Rerouting Russian Oil Would Require Dozens Of Supertankers — That Don’t Exist

Rerouting Russian Oil Would Require Dozens Of Supertankers — That Don’t Exist

Tankers gather off the coast of Thailand. Before its war in Ukraine, Russia was producing about 11 million barrels per day of crude petroleum, about 10% of global demand. Since then, amid sanctions, bans and voluntary embargoes, Russian oil shipments have begun to decline, with the International Energy Agency figuring a reduction in exports of some 3 million bpd by the end of April. Of the shipments at highest risk of cancelation or redirection are the roughly 1. 3 million barrels per day that Russian producers typically shipped via tanker from ports at Primorsk or Ust Luga to European refining centers at Hamburg and Rotterdam. With Europeans increasingly shunning Russian oil, Putin has to find new buyers. China and India in particular have more concerns about maintaining supplies of affordable commodities than they do the moral taint of discounted Russian oil, and have announced increased purchases. But swapping sources is not a simple thing. As Credit Suisse investment strategist Zoltan Pozsar explained in an eye-opening recent missive ("Money, Commodities, and Bretton Woods III," March 31), it can be tougher to rearrange logistics than to find new buyers. Russia typically ships oil to Europe via Aframax tankers that carry about 600,