Sanctions Surge: The Ripple Effect on Global Oil Shipping Rates

Supertanker freight rates surged after the U.S. expanded sanctions on Russia's oil industry, prompting traders to seek alternate shipping routes to China and India. The sanctions affected vessels transporting Russian, Venezuelan, and Iranian oil, tightening the market and increasing shipping costs significantly on key routes.

Freight rates for supertankers skyrocketed following the U.S. government's expansion of sanctions on Russia's oil industry. This has led traders to scramble in booking alternative routes to transport fuel supplies to China and India.

The sanctions have impacted a significant portion of the 'shadow fleet,' vessels involved in shipping oil from Russia, Venezuela, and Iran. An estimated 35% of these tankers have been sanctioned by the U.S., Britain, or the EU, according to Lloyd's List Intelligence.

Chinese and Indian refiners, adapting to these new sanctions, have engaged multiple supertankers to ship oil from the Middle East, as observed in recent elevated freight rate trends across major shipping routes.

(With inputs from agencies.)