Once EU sanctions take effect this winter, Russian oil companies are trying to buy special tanker ships to travel around Europe.
In May to August of this year, purchases of secondhand ice-class tanker rose to $1 billion, according to data from the London-based ship broker. Last year, secondhand ice-class ships were spent around five times what was spent this year.
Russian oil companies would need to take shipments past Europe to other terminals overseas if they wanted to build ice-class tanker.
According to Richard Matthews, the increased demand was likely caused by companies who intend to export Russian oil after EU sanctions take effect, and are stocking up on ships that can sail around Europe.
Increased competition leads to higher prices and more ship-to-ship transfers of oil cargo. It's a tactic that could be used to avoid sanctions from the west. There were 41 ship-to-ship transfers of Russian oil this year that eventually made their way to Europe, compared to just one last year.
Europe is expected to increase its demand for long-distance ships, even though it is not in the same fleet. Once sanctions kick in, the continent will need to find alternative supplies, since they have been ramping up purchases of Russian oil. Increased demand for longer-distance ships to bring in oil from India and Saudi Arabia will result in higher charter rates for European buyers as well.