Biden will pressure the EU to impose sanctions on Russian oil What is the outlook for the tanker market?

News on March 23, the Baltic Dirty Tanker Index fell for the 11th consecutive day, and the United States and the European Union are preparing a new round of sanctions against Russia
.

EU governments will consider whether to impose an oil ban
on Russia on the occasion of Biden's visit to the US-EU summit this week, Reuters reported on March 21.
In order to force Russian President Vladimir Putin to withdraw troops from Ukraine, Europe has imposed a series of punitive sanctions, including freezing the assets of the Russian Central Bank in G7 countries, removing some Russian banks from the SWIFT international settlement system, and canceling the most-favored-nation trade treatment with Russia
.

However, EU member states have different opinions on whether to impose an oil embargo on Russia
.
At the meeting of foreign ministers on March 21, the EU parties failed to reach a consensus
on the implementation of an energy embargo against Russia.

There are no signs of possible consequences of sanctions against Russia, but the price of Brent crude oil still soared to $115.
75 per barrel, and the Baltic crude oil freight index fell 13 points for the 11th consecutive day to 1092 points
.

U.
S
.
National Security Adviser Sullivan said on Tuesday that he would work with his partners to impose further sanctions on Russia and strengthen existing ones.

Louise Dickson, senior analyst at Rystad Energy, said blacklisting Russian oil would be a turning point
for Europe.
Europe has always opposed energy sanctions
against Russia.

According to the Polish Stock Exchange, the rental rate of tankers of all subdivisions has declined, and the term charter of VLCC, Suez and Afra tankers has declined
.

Howe Robinson said a large number of VLCC and Suez-type tankers were waiting to be chartered, and some VLCCs had to resort to discounts to secure leases
.

Two weeks ago, the United States announced that it would stop importing Russian oil and liquefied natural gas
.
According to the U.
S.
Energy Information Administration (EIA), Russian crude accounts for only 3% of total U.
S.
imports, while petroleum products such as refined oil and fuel oil account for 20%
of total U.
S.
imports.
Meanwhile, according to the European Union, 27% of its crude oil comes from Russia
.

The sanctions against Russia are expected to lead to a major shift
in energy trade flows.

French shipbroker Barry Rogliano Salles said India and China could buy Russian oil, while Brazilian oil originally destined for China would be shipped to Europe
.
If so, VLCC will suffer a serious setback, and Suez and Afra tankers will benefit
.

Evercore also said India and China will import LNG from Russia, while Europe will turn its sights to Qatar, the United States and Australia
.

Drewry pointed out in the latest analysis report that if the Russian-Ukrainian war lasts for a long time, or if the West imposes sanctions on Russian crude oil exports, it will be difficult for other oil suppliers to fill the gap
caused by Russian crude oil supply.
In fact, Russian oil accounts for about 11.
5%
of global supply.
In the long run, disruptions to Russian crude oil supplies will hurt global crude oil trade
.
In addition, if crude oil prices remain high, it will adversely affect global oil demand, which in turn will affect
trade.
In this scenario, rents in the crude tanker market will decline
after a short period of firmness.