The cost of shipping oil from the US to Europe has more than doubled this year. The price of a mid-size oil tanker has not been this high in two years.
Baltic Exchange data shows that earnings per day for Aframax vessels heading from the US Gulf to northern Europe have gone up to $57,000. The price of these cargos has increased twelve-fold from the beginning of the year.
Russian crude flows have been diverted to Asia since the beginning of the war in Ukraine. The US has stepped in as a big supplier despite the fact that European buyers have largely turned away from Russia's Urals crude.
The current sky-high rates should remain heightened in the months ahead as long as sanctions against Russia remain, according to an analyst.
The analyst noted that the potential for a global recession could affect oil demand.
The International Energy Agency said Thursday that Russia's oil production is much higher than anticipated. Moscow has been able to send barrels to buyers other than India and China in order to keep output high.
IEA analysts said that the market consensus was too pessimistic about Russia's ability to re- route volumes. Russia's exports were adjusted towards other buyers.
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