At least 20 oil tankers queuing off Turkey to cross from Russia’s Black Sea ports to the Mediterranean face further delays as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil, according to Reuters.
Turkish maritime authorities issued a notice in November 2022 asking for additional guarantees from insurers that the transit through the Bosphorus would be covered starting from the beginning of December 2022.
The new rule was announced before a US$60 per barrel price cap was imposed on Russian seaborne crude. Western insurers are required to retain proof that Russian oil covered is sold at or below that price. The industry has a 90-day grace period to comply with the G7 plan.
“Extra coverage from Russian P&I seems to be the way out for tanker operators,” the shipping source said, referring to protection and indemnity insurance providers.
We’ll see further delays if owners (or) operators can’t provide the required guarantees.”
Norway’s Skuld, among the top tier of P&I clubs, said such insurers cannot provide the level of detail that has been required.
“The Turkish government’s requirements go well beyond the general information that is contained in a confirmation of entry letter,” Skuld said in a note.
Millions of barrels of oil per day move south from Russian ports through Turkey’s Bosphorus and Dardanelles straits into the Mediterranean.
The shipping agency GAC said on Tuesday that 13 vessels were waiting to transit the Bosphorus strait southbound, all of them oil tankers and 10 of them holding Kazakh crude after loading at the Russian port of Novorossiisk.
One tanker which loaded oil at the port cleared the straits over the weekend after providing proof of insurance. Coverage for the Liberia-flagged Vladimir Tikhonov tanker came from Russian insurer.
Tribeca shipping agency said nine oil tankers were waiting to transit the Dardanelles southbound on Tuesday.
GAC also said that average waiting times southbound at the Bosphorus, four days for vessels longer than 200 meters, up from one day in mid-November.
For the Dardanelles strait, average waiting times southbound were also around four days, up from 1-1/2 days in mid-November, Tribeca said.
According to Seatrade Maritime News, LNG shipping is seeing exceptional strength, already fueled by geopolitical vagaries, and with the impact of winter weather patterns yet to be determined.
The sector received considerable emphasis at Marine Money’s mid-November Ship Finance Forum, held in midtown New York.
Mike Tusiani, Poten & Partner’s Chairman Emeritus, in introducing the day’s kick-off panel, described the present situation as an unprecedented time in the LNG trades.
His colleague at Poten, Jefferson Clarke, talked about “ton time” having supplanted ton miles as the operative metric in explaining LNG shipping’s rise.
He said that commodity prices are driving the flows of LNG; in short, it gives the incentive for charterers to hold on to tonnage…and not get access to tonnage.
He explained that vessel charterers have been moving vigorously into the term market, and explicitly linked high LNG prices with demand for term charters.
Though media headlines within the mainstream and trade press have pointed to charter hires for high end LNG carriers at US$400,000 per day or more, spot fixtures are actually few and far between.
Oystein Kalleklev, CEO of Flex LNG said, after reviewing fixture lists, that he could only find two spot fixtures done in November.
On a shipowner panel later in the day, Kalleklev opined that LNG shipping is like a liner trade in contrast to more spot-oriented commodity sectors, including VLGC/ LPG transporter Avance Gas, where he is Executive Chairman.
On that same panel, he described the FLNG strategy, if he were taking delivery of a hypothetical new vessel, as “fix it out, finance it, and pay a hell of a lot of dividends.”
He described one year time charters as being in the US$200,000 per day range with three-year deals drawing around US$170,000 per day but added that there will be volatility.
In the earlier panel, he indicated a preference for a strategy of fixing FLNG’s vessels on term business when they come off existing charters, rather than expanding the fleet with expensive newbuilds.
Kalleklev attributed strength in the markets to waiting and delays, which effectively reduce available supply, in explaining the market’s dynamics. In LNG trades, he explained that “ton time has mitigated the downturn in ton miles.
People are waiting more, people are deploying floating storage. One component of the potential volatility awaiting market participants this time around might be unwinding of such storage if the present contango structure LNG pricing was to flatten out.
He noted that a precipitous market fall in late 2018 had been brought about by a previous instance of floating storage being unwound.