Tag Archives: sanctions

Logistics companies have found a way to circumvent EU sanctions

April 12 2022

The situation with the introduction of the fifth package of sanctions by the European Union worried logistics companies involved in import-export operations, but the situation is not too catastrophic, since the share of Russian and Belarusian carriers in the market for transportation from Russia to Europe and back was about 30%. Alexei Misailov, Business Development Director of “FM Logistic” in Russia, announced this on April 12 to REGNUM news agency. At the same time, according to him, even this share played a significant role, primarily in export shipments, and now many companies are looking for alternative options for maintaining existing routes.

“Currently, the use of transit countries (for example, Turkey, which, however, is longer and more expensive), is being considered, but the optimal solution seems to be one that would allow changing tractors at the border of Russia, Belarus and Europe. Legislatively, it is still possible and this measure will help to avoid a crisis in road freight traffic between Russia and the European Union,” the expert explained.

According to his estimates, it will take about two weeks to establish such seamless solutions between European, Russian and Belarusian carriers. In this case, the increase in delivery time will not exceed more than one day.

“Against the background of many days (4-5 days) of downtime at the borders awaiting inspection, this looks more than a compromise option. As for the cost of transportation, it can grow by 300-400 euros due to the use of border terminals for re-coupling trailers to new tractors,” Misailov added.

Recall that the EU stopped the passage of vehicles registered in Russia and Belarus from April 8.

Source: https://portnews.ru/digest/23116/

Will Russian oil go to Asia?

March 25 2022

The US has imposed an embargo on Russian oil imports. Deliveries to the EU countries in the near future are under a big question. However, Russian exports to other destinations have already started to grow. For example, this week Indian Nayara Energy oil refiner acquired Russian oil after a year-long hiatus, having bought about 1.8 million barrels of Urals oil from Trafigura trader.

Apparently, the countries that have not imposed sanctions against Russia will buy more of its oil. The obvious options for increasing flows are China and India. However, such a solution would require China to be ready to enter into the conflict with Western countries. The alternative is India, which is already increasing purchases of Russian oil. However, when supply flows change, inevitable difficulties will arise due to the limited capacity of the Eastern Siberia-Pacific Ocean oil pipeline and a significant increase in the cost of freight for transportation from ports in the European part of Russia. The redirection of Russian oil supplies from Europe to the Asia-Pacific region will double the average delivery time (from 15 to about 30 days), which will increase the need for tankers. The Russian fleet is able to independently provide only about a third of the sea transportation of oil and oil products. Russian tankers are more suitable for the transportation of crude oil. As for petroleum products, its fleet can transport only 17% of total exports. Due to the fact that Russian refineries are located mainly in the European part of the country, transporting oil products by tankers is more expensive than transporting crude oil, and therefore it is more difficult to redirect gasoline and fuel oil to Asian markets.

The search for new markets in this case will not be a problem: the most significant increase in demand for crude oil in the coming years is expected in Asia, primarily in China and the developing countries of the region. However, it will take some time to reorient the Russian oil industry to the east. In the short term the conclusion of new supply contracts, solving logistics issues and chartering tankers is expected, in the longer term, the implementation of new pipeline projects is considered. 

Source: PortNews.ru