As demand for Urals crude drops and customers consider the growing risks of sanctions, traders are increasingly using tanks to store it. Calculations based on LSEG data and trade data.

India and Turkey, two major importers of Russian oil, have cut their purchases in the past year due to tougher Western sanctions. These include recent U.S. sanctions on Rosneft & Lukoil as well as a European Union prohibition on fuel made from Russian crude. The price of Russian oil has fallen to record lows.

The traders say that the growing number of tanks waiting to discharge their cargoes have reduced vessel availability to ship Russian oil.

According to traders and LSEG data, several tankers transporting Urals deliberately slow down their voyages to try to find buyers en route.

According to LSEG terminal estimates and data, approximately 19 million barrels Urals that were loaded before the 15th of December are either in transit or awaiting discharge.

Traders said that extended pauses in voyages effectively turn some tankers into floating stores, although LSEG data shows that?not every vessel remains stationary throughout the waiting time.

In normal circumstances, Urals shipments from Russia's Baltic ports take about 45 days to reach China, and around 30 days to reach India. However, many vessels now take significantly longer.

The Gattaca is a tanker with a Panamanian flag, managed by Star Marine Management in Greece. It left the Baltic Port of Primorsk, on November 21, carrying approximately 100,000 metric tonnes of Urals bound to India. However, it has not yet reached its destination.

LSEG data indicates that it has been?at Sea for more than 60 Days, including a period of around a Month off the coasts of Oman.

Star Marine Management replied in an email that it is "the Technical Manager of Gattaca". The company stated that the vessel was fully operational and worked in strict compliance with all laws, regulations and sanctions. It is also insured by P&I Club Gard.

The company said that the duration of a voyage depends on commercial and operational factors. This can include, but is not limited to: trading patterns and voyage orders; weather conditions, port and berth congestion; berthing turn and other circumstances outside the Technical Manager's control.

As vessel availability is reduced by slower turnaround, traders claim that prolonged idle time on loaded tankers increases seller costs and drives freight rates up.

Sources said that the freight rates for shipping Urals to India from western Russian ports resumed their rise in January due to a tightening of tonnage supply, increased shipping risks, and storm disruptions on the Black Sea. Mark Potter, Mark Heinrich and Mark Potter (reporting from Moscow)

(source: Reuters)