Bloomberg: Russian oil enters Asia via Spain

Russian oil is delivered to Asia in transit through the Spanish semi-exclave of Ceuta (the northern coast of Africa), which makes it possible to reduce shipping costs, circumvent sanctions and simplify logistics. This is reported Bloomberg. The agency notes that Russia has to sell its oil at a discount, but it still ships it in large quantities.

Prior to the entry of Russian troops into Ukraine in 2022, the Russian Federation rarely used the waters near Ceuta as a stopover to transport its oil. Back then, Moscow shipped oil directly to European refineries in small tankers. But later, Russia began to use the Spanish city as a base for reloading from ship to ship – at first periodically, and now regularly.

The route is as follows: Russia is loading crude oil into small tankers called Aframaxes at its export terminals in the Baltic Sea, such as Primorsk and Ust-Luga. These ships transport crude oil to Ceuta. Near the Spanish city of Aframax, carrying about 700,000 barrels, are waiting for the arrival of a major crude carrier, a VLCC-type supertanker. Aframaxes approach the VLCC and transfer fuel from ship to ship. Usually, up to three such operations are required to load one VLCC, which can transport at least 2 million barrels. After that, the VLCC begins its journey towards Asia, bypassing Africa.

Bloomberg notes that since December, six VLCCs have done this with more than 15 Aframaxes. According to the agency, two VLCCs are currently waiting for tankers to be unloaded.

Moscow does not violate international law, the agency notes. The tankers generally remain within 12 nautical miles of the coast without crossing the border, although they do occasionally approach Ceuta and Spanish territorial waters.

According to Bloomberg, the tankers are mainly owned by Russians and Chinese.

The agency names several reasons why it is beneficial for Russia to use Ceuta. Firstly, it is fast: the route from the Baltic to Ceuta takes 10 days, and if you continue to China, this will add 40 days. Secondly, the cost is significantly reduced: it is much cheaper to ship crude oil to VLCCs than to Aframaxes. There are more VLCCs available now, so it’s cheaper to use them. VLCC rentals cost less than $20,000 per day, while Aframax costs $55,000 per day. Thirdly, Ceuta is located in a convenient location: inside the Mediterranean Sea, it is protected from storm winds. At the same time, the city is close to Gibraltar, and VLCCs that pick up cargo can quickly return to open waters to go around Africa and Asia without wasting much time.

The embargo on sea supplies of Russian oil to the EU countries came into force on December 5. There is also a price ceiling for oil from Russia, which was introduced by the EU, G7 and Australia – $60 per barrel. January 20 coalition of Western countries agreed introduction of two price ceilings for Russian oil products. One will be set for products that are traded at a premium to oil (diesel fuel, gas oil), the second – for products that are traded at a discount to oil (fuel oil).

Read more about the new restrictions in the material “Kommersant FM” “Oil products have their own ceiling”.

Daria Erozbek