United Nations aid chief Martin Griffiths said on Thursday it was unlikely the Black Sea grain deal would be expanded in the near term to include more Ukrainian ports or reduce inspection times.

Kyiv has called for an expansion of the deal with Moscow which was mediated by the United Nations and Turkey and allows Ukraine, a major global grain exporter, to ship food products from three of its Black Sea ports despite Russia’s invasion.

“I don’t see that happening in the next, near term,” the U.N. under-secretary-general for humanitarian affairs and emergency relief coordinator told Reuters in an interview in the Ukrainian capital.

“I think it would be great if it could be expanded, the more grain that gets out into the world, the better clearly from our point of view, from the world’s point of view. But I don’t think that’s immediately likely.”

Griffiths travelled to Ukraine this week, visiting the southern cities of Mykolaiv and recently liberated Kherson as Ukraine grapples with winter power outages caused by Russian air strikes on critical infrastructure.

The official, who said he was not in Ukraine to mediate and that he was strictly there to review the humanitarian aid program, said on Nov. 30 that a deal was “close” to agreeing a resumption of Russian ammonia exports via Ukraine.

Ammonia, which is used to make fertilizer, would be pumped through an existing pipeline to the Black Sea. The pipeline was shut down when Russia invaded this year.

On Thursday, Griffiths said work on that agreement was still under way and that he did not know when it would go through.

“We continue to… obviously want it because … fertilizer at the moment is almost more important than grain in terms of export to the global south,” he said. “So we’re still working at it. I don’t know when it will go through.”

Russian and Ukrainian representatives have discussed the possibility of linking a prisoner swap that would release a large number of prisoners on both side to the resumption of ammonia exports.

Rebeca Grynspan, Secretary-General of the U.N. Conference on Trade and Development, voiced optimism earlier on Thursday that there would be a breakthrough in negotiations.

At a news conference earlier on Thursday with Ukraine’s prime minister, Griffiths said international humanitarian aid agencies had reached just under 14 million people with assistance since the beginning of the war.

Russia is concerned about a build-up of oil tankers in the Bosphorus Strait and is discussing the issue with insurance and transport companies, RIA cited Russian deputy foreign minister Alexander Grushko as saying on Wednesday.

At least 20 oil tankers queuing off Turkey face more delays to cross from Russia’s Black Sea ports to the Mediterranean as operators race to adhere to new Turkish insurance rules added ahead of Europe’s ship insurance ban and a G7 price cap on Russian oil, industry sources said on Tuesday.

Turkish maritime authorities issued a notice seen by Reuters last month asking for additional guarantees from insurers that transit through the Bosphorus would be covered starting from the beginning of this month.

“We are aware of this situation. Of course, it causes us concern from the point of view of the interests of our operators. This problem is being discussed with transport and insurance companies. After all, insurance companies insure, not the state,” Grushko is quoted as saying.

“If the problem is not solved, of course, there will be involvement on the political level.”

The European Union banned all seaborne Russian crude imports from Dec. 5, with a fuel import ban to follow in February.

It also banned companies and individuals in the bloc from providing financing, brokerage, shipping and insurance services to ship Russian oil elsewhere if the crude was bought above a price cap of $60 a barrel that came into effect on Monday.

Disruptions in tanker traffic from Russia’s Black Sea ports to the Mediterranean are a result of a new Turkish insurance rule, not the price cap on Russian oil agreed by a coalition of G7 countries and Australia, an official with the group said on Tuesday.

Kazakhstan, a large oil exporter, said on Wednesday that the build-up of the oil tankers at the Bosphorus is normal during the winter season.

“The waiting time in the Bosphorus and Dardanelles is six days for now. For the winter season, this is a normal wait; last year, the wait in the straits in December was about 14 days,” Kazakhstan’s Energy Ministry said in a statement.

The market for old oil tankers is booming, and it’s all down to efforts by Western nations to curb trade in Russian crude.

As Western shipping and maritime services firms steer clear of Russian oil to avoid falling foul of sanctions or harming their reputations, new companies have leapt into the void, and they’re snapping up old tankers that might normally be scrapped.

The European Union banned all seaborne Russian crude imports from Dec. 5, with a fuel import ban to follow in February.

It also banned companies and individuals in the bloc from providing financing, brokerage, shipping and insurance services to ship Russian oil elsewhere if the crude was bought above a price cap of $60 a barrel that came into effect on Monday.

In recent months, ageing tankers have been sold by Greek and Norwegian owners for record prices to pop-up Middle Eastern and Asian buyers taking advantage of sky-high charter prices for vessels willing to ship Russian oil to India and China.

Tanker management companies such as Fractal Shipping, run out of Swiss financial hub of Geneva, are reaping the rewards.

In less than a year, Fractal has put together a fleet of 23 oil and fuel tankers bought recently by owners in Dubai. Most are taking Russian crude from Baltic and Black Sea ports to Asia, Refinitiv Eikon ship tracking showed.

Chief Executive Mathieu Philippe said he launched the idea for Fractal a year ago, betting that the global tanker fleet was getting stretched and that both the cost of vessels and freight rates would inevitably rise from pandemic lows.

But, by the middle of this year, new ship owners, known as principals, started asking him to get into the Russian oil business.

“We were given a lot of tankers in August and September. Our principals wanted to come into the business for the Russian opportunity,” the shipping industry veteran told Reuters.

PRICE SURGE

Major Western oil companies typically stop using tankers when they are about 15 years old, and many would be scrapped. Fractal’s fleet, meanwhile, consists entirely of older vessels ranging from 13 to 19 years, Fractal’s website shows.

With new entrants keen to get a slice of the Russian business, second-hand oil tanker prices have surged, especially for Aframax vessels that can carry up to 600,000 barrels, the standard size used for loading crude at Russia’s Baltic ports.

 The price tag for 20-year-old Aframaxes has jumped 86% from $11.8 million on Jan. 1 to $22 million now, according to valuation company VesselsValue.

So far this year, 148 Aframax sales have been reported, a 5% increase from the same period in 2021, VesselsValue said.

Research by ship broker Clarksons showed that more tankers were sold in the first 11 months of 2022 than any full-year previously and sales in October set a new monthly record of 76.

Up until Dec. 5, there were no Western sanctions on transporting Russian oil to Asian markets, so Fractal and other management companies had not breached any rules.

To avoid potential pitfalls, though, Philippe said Fractal does not deal with any Russian-owned companies. That would also be a no-go for Western banks financing maritime trade, he said.

To prevent the new EU sanctions from halting millions of barrels per day of Russian crude exports and driving up global fuel costs, the Group of Seven (G7) rich nations has mitigated its impact by permitting exports below a cap of $60 a barrel.

The aim of the plan is reduce to Russia’s export revenue but keep oil supplies flowing.

The agreement on the price cap means operations such as Fractal’s can carry on shipping Russian crude without any issues, as long as the deals are below the cap.

The Kremlin has repeatedly said it will not sell oil below the new price cap while Russia’s two biggest buyers, China and India, have not promised to abide by the limit.

SAILING TO RUSSIA

New ship owners willing to transport Russian oil are cashing in. “Ships earning $80,000 a day in the Mediterranean can make $130,000 a day if they carry Russian oil,” said one ship broker, who declined to be named as he was not authorized to speak to the media.

Crude tanker rates have jumped to highs not seen since 2008, aside from a brief period in 2020 when oil firms scrambled for tankers to store fuel as demand crashed due to the pandemic.

Tanker owners can make more than $100,000 a day for some journeys, said Omar Nokta, analyst at investment bank Jefferies.

“While it remains to be seen how the price cap on Russian exports will ultimately play out, what is clear is that the tanker fleet is becoming stretched and traveling longer distances,” he said.

More tankers are now being used for voyages taking weeks, shipping Russian oil from the Baltic and Black Sea to Asia, whereas Russian oil was mainly sold in Europe previously and the voyages only took a few days.

Shipbuilding also stalled during the pandemic and deliveries of new oil tankers next year are set to be historically low, according to analysis from shipping brokers.

Reuters monitored 18 of Fractal’s tankers using Refinitiv Eikon ship tracking data.

Twelve have loaded oil at Russian ports in the last two months either for the first time, for the first time since the Ukraine war started, or at least for the first time in over a year, the data showed. Two have been calling regularly at Russian ports.

For instance, the Fractal-managed Charvi tanker loaded crude at Russia’s Baltic port of Primorsk in the middle of September before sailing to discharge its cargo in Sikka, India.

The tanker formerly owned by Norway’s Viken Shipping under the name Storviken had never previously called at a Russian port, Refinitiv Eikon data going back to 2010 showed.

Similarly, Daphne V, another tanker previously owned by Viken Shipping and now managed by Fractal called at Primorsk on Nov. 11 for the first time since the Ukraine war started and is heading to the Suez Canal en route to Asia.

The tanker was called Kronviken before it changed hands.  Viken Shipping said it had not sold ships to Russian owners but declined to identify the buyers.

Ship broker Braemar estimated that about 120 of the 212 tankers sold to likely Russian buyers this year were looking at Russian crude oil trades, while there were virtually no sales last year to buyers involved in shipping Russian crude.

CIRCUMVENTING SANCTIONS

The U.S. Treasury has provided some guidance about how the cap will work, but questions remain over its enforcement.

“The price cap is very confusing,” Fractal’s Philippe said. “We are definitely one of the companies that want to remain in the Russian trade. As businessmen we have to be opportunistic.”

Buyers must provide documents such as invoices to shipping companies or insurers to show they stuck to the cap but it will be essentially down to self-monitoring, with no penalties for providers of shipping services if they operated in good faith.

Deals shown to be outside the price cap would effectively break sanctions, and other vessels that have at some point been involved in circumventing oil export sanctions on Venezuela and Iran may well play a part in that trade, analysts say.

One aim of the G7 price cap plan is to prevent this so-called ‘dark fleet’ getting bigger by allowing Russian oil exports to take place transparently without breaking sanctions.

This dark fleet, which accounts for about 10% of the world’s oil tankers according to Trafigura and other shipping industry sources, has helped Iran circumvent a U.S. embargo for the better part of a decade, and Venezuela since 2019.

At least 21 tankers have switched to shipping Russian oil after previously being used for Iranian shipments, said Claire Jungman, chief of staff at U.S. advocacy group United Against Nuclear Iran (UANI), which monitors Iran-related tanker traffic through ship and satellite tracking.

Of those vessels, at least four have four changed ownership in recent months.

Ship broker Braemar also said that some of the vessels involved in shipping Iranian and Venezuelan oil were shifting to transporting Russian oil.

It estimated that the so-called shadow fleet shipping oil from those two countries and some of them also for Russia was made up of 107 Aframaxes, 65 larger Suezmaxes and 82 VLCCs (Very Large Crude Carriers).

“Instead of having one optimized fleet you now have two separate optimized fleets,” said Christian M. Ingerslev, chief executive of Denmark’s Maersk Tankers.

“If sanctions are continually adjusted, it becomes very difficult for the sanctions-compliant companies to take the risk because they don’t know what will happen tomorrow,” he said.

A deal aimed at easing global food shortages by facilitating Ukraine’s agricultural exports from its southern Black Sea ports was extended for 120 days on Thursday, though Moscow said its own demands were yet to be fully addressed.

The agreement, initially reached in July, created a protected sea transit corridor and was designed to alleviate global food shortages by allowing exports to resume from three ports in Ukraine, a major producer of grains and oilseeds.

“I welcome the agreement by all parties to continue the Black Sea grain initiative to facilitate the safe navigation of export of grain, foodstuffs and fertilisers from Ukraine,” UN Secretary General Antonio Guterres said in a statement.

Guterres said the UN was also “fully committed to removing the remaining obstacles to exporting food and fertilisers from the Russian Federation” – a part of the deal Moscow sees as critical.

Russia’s foreign ministry confirmed the extension of the Black Sea grain deal for 120 days starting from Nov. 18, without any changes to the current one.

The export of Russian ammonia via a pipeline to the Black Sea has not yet been agreed as part of the renewal, two sources familiar with discussions told Reuters. But Russia would continue efforts to resume those exports, one of the sources added. Ammonia is an important ingredient in fertiliser.

Ukrainian President Volodymyr Zelenskiy said in September he would only back the idea of reopening Russian ammonia exports through Ukraine if Moscow handed back prisoners of war, an idea the Kremlin quickly rejected.

“The renewal of the Black Sea grain initiative is good news for global food security and for the developing world,” Rebeca Grynspan, secretary-general of the U.N. Conference on Trade and Development said on Twitter, calling it a “beacon of hope”.

“Solving the fertiliser crunch must come next,” she added.

The 120-day extension was less than the one-year sought by both the United Nations and Ukraine. Russia said earlier this week that the current duration period of the deal seems “justified.”.

Global food price crisis
A drop in shipments from Ukraine following Russia’s invasion in February has played a role in this year’s global food price crisis but there have also been other important drivers including the COVID-19 pandemic and continued climate shocks such as droughts in both Argentina and the United States.

Since July, some 11.1 million tonnes of agricultural products have been shipped under the grain deal, including 4.5 million tonnes of corn and 3.2 million tonnes of wheat.

Wheat prices in Chicago fell following the news that the agreement would be extended. The benchmark contract was down 2% and corn was down 1.3%.

“This is bearish for the market because it removes remaining doubts and we have something clear for the coming four months,” one French trader said.

“However, the fact that it is only for four months instead of the one year Ukraine had been asking for means that uncertainty will resume in four months, with people wondering whether Russia will sign an extension or not.”

Both Ukraine and Russia are major global grain exporters. Russia is the world’s largest wheat exporter and a major supplier of fertilisers to global markets.

Since July, Moscow has repeatedly said that its shipments of grain and fertilisers, though not directly targeted by Western sanctions, are constrained because the sanctions make it harder for exporters to process payments or to obtain vessels and insurance.

Moscow presumed that the Russian concerns related to easier conditions for its exports would be fully taken into account in coming months, its foreign ministry said.

“We took note of the UN Secretariat’s intensified efforts to implement its commitments in this regard and the information provided to us on its interim results on the removal of obstacles to the supply of Russian fertilisers and foodstuffs,” the ministry said.

“All these issues should be resolved within the 120 days for which the ‘package deal’ is extended.”

Russia suspended participation in the U.N.-brokered Black Sea grain deal after what it said was a Ukrainian drone attack on vessels in the Bay of Sevastopol in the early hours of Saturday. What do we know so far?

WHAT HAPPENED?

Russia said 16 air and maritime drones attacked civilian and Black Sea Fleet vessels in the Bay of Sevastopol in Crimea at 0420 Kyiv time on Saturday.

Russia said all nine of the air drones were destroyed. Four of the seven maritime drones were destroyed on the outer perimeter of the bay, but three more made it inside before they were destroyed, Russia said. Russia reported minor damage to the minesweeper Ivan Golubets, the ministry said.

Reuters was unable to immediately verify battlefield accounts. Unverified footage on social media showed what appeared to be maritime drones speeding across the water towards a Russian battleship while bullets were fired at the drone.

WHO CARRIED OUT THE ATTACK?

Russia’s defense ministry said the attack was carried out by Ukraine’s 73rd Marine Special Operations Center under the guidance and leadership of British navy specialists in the town of Ochakiv on the Black Sea coast. It said that personnel from the same British navy unit, which it did not name, had blown up the Nord Stream pipelines last month. Britain denied the claim.

“To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defence is resorting to peddling false claims of an epic scale,” a spokesperson for Britain’s ministry of defense said.

“This latest invented story says more about the arguments going on inside the Russian Government than it does about the West.” Ukraine has neither denied nor confirmed that it carried out the drone attack on Sevastopol and has instead suggested that Russia carried out the attack on itself so that it could suspend participation in the grain deal. Ukrainian President Volodymyr Zelenskiy’s chief of staff, Andriy Yermak, said Russia had carried out “fictitious terrorist attacks on its own facilities”.

Neither Russia nor Ukraine has provided evidence for their claims.

WHERE DID THE DRONES COME FROM?

Russia says it has recovered the wreckage of some of the maritime drones. It said it had investigated the memory of the Canadian-made navigation modules installed on the drones. The maritime drones, it said, were launched from the coast near Odesa and had moved along the grain corridor security zone before heading into the Bay of Sevastopol, the largest city on the Crimean peninsula that Russia annexed from Ukraine in 2014.

The defense ministry said one of the maritime drones appeared to have started from within the security zone of the grain corridor itself. “This may indicate the preliminary launch of this device from aboard one of the civilian vessels chartered by Kyiv or its Western patrons for the export of agricultural products from the seaports of Ukraine,” the defense ministry said.

WHAT HAPPENS TO THE GRAIN DEAL?

Russia has been careful not to completely walk away from the deal.

“The Russian side cannot guarantee the safety of civilian dry cargo ships participating in the ‘Black Sea initiative’ and suspends its implementation from today on indefinite period,” the Russian foreign ministry said on Oct. 29.

Talks on extending a July deal that resumed Ukraine Black Sea grain and fertilizer exports are not making much progress because Russian concerns are not being taken into proper account, Russia’s U.N. ambassador in Geneva said on Thursday.

Senior United Nations officials are negotiating with Russia to extend and expand the July 22 deal that could expire next month if an agreement is not reached.

“I wouldn’t say that much has been achieved as a result of the latest consultations. The dialogue is continuing,” Gennady Gatilov told reporters.

He reiterated Moscow’s stance that Western sanctions were hamstringing its own exports of grain and fertilizer, even to poor countries that need the supplies.

“There is no point in continuing an agreement, one part of which may come out as dead on arrival. So, of course, the Russian… authorities will be very seriously considering the future of the extension of this grain deal,” he said.

Gatilov told Reuters last week that Moscow has submitted concerns to the United Nations about the agreement on Black Sea grain exports and was prepared to reject renewing the deal.

The agreement creating a protected sea transit corridor was designed to alleviate global food shortages, with Ukraine’s customers including some of the world’s poorest countries.

The early focus was on moving ships which had been stuck in Ukrainian ports for months, most of which were laden with corn and booked by developed countries.

The bulk of last year’s wheat crop in Ukraine, which is harvested earlier than corn, had already been shipped when Russian troops entered the country.

Developing countries such as Somalia and Eritrea rely heavily on imports of wheat from both Russia and Ukraine.

In a briefing for Geneva reporters, Gatilov played down the idea that Russia would use nuclear weapons in the Ukraine conflict even though the Kremlin has repeatedly raised the prospect of doing just that.

“We will never do this, at least, we will not be the country who initiate this, so it’s clear,” he said.

Gatilov said Moscow had told the International Committee of the Red Cross that it would cooperate on arranging visits to Ukrainian prisoners of war.

“But you must imagine that we have more than 6,000 Ukrainian prisoners and sometimes it’s not possible to organize all visits. Ukrainians have less. And this is not the issue of number of visits. The issue is the quality of visit and the result of this visit,” he said.

He also dismissed allegations that Russian forces or their allies were forcibly deporting Ukrainian children.

“We are not trying to – as some mass media are trying to put it – kidnap Ukrainian children. This is not our goal. This is simply an attempt to help children that need really care, that need support,” he said.

Moscow has submitted concerns to the United Nations about an agreement on Black Sea grain exports, and is prepared to reject renewing the deal next month unless its demands are addressed, Russia’s Geneva U.N. ambassador told Reuters on Thursday.

The agreement, brokered by the United Nations and Turkey in July, paved the way for Ukraine to resume grain exports from Black Sea ports that had been shut since Russia invaded. Moscow won guarantees for its own grain and fertilizer exports.

The agreement helped stave off a global food crisis: Russia and Ukraine are two of the world’s biggest grain exporters and Russia is the number one fertiliser exporter. But Moscow has repeatedly complained about its implementation, arguing it still faces difficulty selling fertilizer and food.

In an interview with Reuters, Gennady Gatilov, Russia’s ambassador to the United Nations in Geneva, said Moscow had delivered a letter to U.N. Secretary-General Antonio Guterres on Wednesday setting out a list of complaints. U.N. officials are due in Moscow on Sunday to discuss the renewal of the agreement.

“If we see nothing is happening on the Russian side of the deal – export of Russian grains and fertilizers – then excuse us, we will have to look at it in a different way,” he said.

Asked if Russia might withhold support for the grains deal’s renewal over the concerns, he said: “There is a possibility…We are not against deliveries of grains but this deal should be equal, it should be fair and fairly implemented by all sides.”

Gatilov declined to make a copy of the letter available.

U.N. speokesperson Stephane Dujarric said: “We remain in constant touch with Russian officials, as well as with officials from the European Union, the United Kingdom and the United States in order to remove the last obstacles to facilitate the export of Russian grain and fertiliser.”

He said Guterres was committed to those efforts and to having an extended and expanded Black Sea Grain Initiative.

Gatilov, a career diplomat who was deputy minister of foreign affairs before taking up the Geneva post, said that he saw fading prospects for a negotiated settlement to the nearly eight month war in Ukraine. He cited what he called “terrorist acts” such as an explosion on a bridge to Crimea.

“All this makes it more difficult to reach a political solution,” he said.

Washington has said that Russian claims to be open to talks on the war’s future amount to “posturing” as it continues to strike Ukrainian cities.

Asked about the prospect of a meeting between President Vladimir Putin and U.S. President Joe Biden, Gatilov said it was not feasible given the levels of U.S. military support for Ukraine. “It makes the U.S. a part of the conflict,” he said.

However, he was more upbeat on other negotiated outcomes such as on aid access and a further prisoner swap, calling these “a possibility”. He said a delegation of the International Committee of the Red Cross had met with Russia’s defense ministry in Moscow recently about a possible swap, without giving further details. The ICRC did not immediately respond to a request for comment.

Russia needs permission for its vessels to conduct investigations into explosions that damaged Nord Stream pipelines in the Baltic Sea, Deputy Prime Minister Alexander Novak said on Friday.

He did not specify who should grant the permission, but Nord Stream AG, the operator of the older Nord Stream 1 pipeline, said last week that the owner of a survey vessel it chartered did not have the greenlight from the Norwegian foreign ministry to depart and start assessing ruptures to the pipelines.

“The whole question is in the access for our vessels, which should have rights of passage (to the area of the incidents),” Novak told reporters, commenting on Moscow’s efforts to investigate the damage to the pipelines.

Russia said on Thursday it had summoned diplomats from Germany, Denmark, and Sweden to complain that representatives from Moscow and Gazprom had not been invited to join an investigation into the leaks in the gas pipelines that run from Russia to Europe.

Sweden has previously rejected calls from Russian authorities to be part of the investigation or to share any findings before it is complicated.

The Danish foreign ministry said on Thursday “the Russian wish to participate in the investigation of the Nord Stream leaks has been brought up through diplomatic channels in Moscow and Copenhagen”. The cause of the damage to the Nord Stream pipelines remains unclear, but European Union countries have said they suspect sabotage, while Russia has called the incidents an “act of international terrorism” and blamed the West.

The Danish authorities on Monday asked ships to steer clear of a five nautical mile radius off the island of Bornholm after a gas leak overnight from the defunct Russian-owned Nord Stream 2 pipeline drained into the Baltic Sea.

The German government said it was in contact with the Danish authorities and working with local law enforcement to find out what caused pressure in the pipeline to plummet suddenly. Denmark’s energy ministry declined to comment.

The pipeline has been one of the flashpoints in an escalating energy war between Europe and Moscow since Russia’s invasion of Ukraine in February that has pummeled major Western economies and sent gas prices soaring.

“A leak today occurred on the Nord Stream 2 pipeline in the Danish area,” said Denmark’s energy agency in a statement.

Danish maritime authorities had issued a navigation warning and established a zone around the pipeline “as it is dangerous for ship traffic”, it added.

Nord Stream 2’s operator said pressure in the pipeline, which had contained some gas sealed inside despite never becoming operational, dropped from 105 to 7 bars overnight.

The pipeline, which was intended to double the volume of gas flowing from St. Petersburg under the Baltic Sea to Germany, had just been completed and filled with 300 million cubic meters of gas when Germany cancelled it days before the invasion.

“Overnight the Nord Stream 2 landfall dispatcher registered a rapid gas pressure drop on Line A of the Nord Stream 2 natural gas pipeline,” Nord Stream 2’s operator said in a statement.

“Investigation is ongoing.”

No clarity
European countries have resisted Russian calls to allow the Nord Stream 2 pipeline to operate and accused Moscow of using energy as a weapon. Russia denies doing so and blames the West for gas shortages.

“We are currently in contact with the authorities concerned in order to clarify the situation. We still have no clarity about the causes and the exact facts,” said a statement from the German economy ministry.

The Swiss-based operator, which has legally been wound up, said it had informed all relevant authorities about the leak.

Russian gas exporter Gazprom  referred questions about the incident to the Nord Stream 2 operator.

Russia has cut off gas supplies to several countries and also halted flows through the Nord Stream 1 pipeline, blaming Western sanctions for hindering operations.

President Vladimir Putin in September chided the West for keeping Nord Stream 2 shut.

Monday’s gas leak happened a day before the ceremonial launch of the Baltic Pipe carrying gas from Norway to Poland.

The project is a centerpiece of Warsaw’s efforts to diversify from Russian gas. Danish Prime Minister Mette Frederiksen is due to travel to Poland on Tuesday to mark the occasion.

Nord Stream 2 was widely unpopular among Danish lawmakers and the country in 2017 passed a law which allowed it to ban the project from passing through its territorial waters on security grounds.

But Nord Stream 2 later changed the original route to steer it through Denmark’s exclusive economic zone, where this veto could not be applied.

The number of tankers used to store bunker oil along the Singapore Strait has increased since the Ukrainian war broke out, and will rise further as sanctions-hit Russian supplies head for Asia. It’s possible, industry sources and analysts said.

 

An increase in liquid storage supplies along strategic waterways indicates that more supplies are available to Asia, which will help ease tight markets. At the same time, however, it could limit the recovery of spot fuel oil prices this year, weighing on Asian refining profits for this grade.

Earlier this month, the European Union announced that it may ban the import and transit of some fuel oil from Russia from August 10.

 

The number of vessels used to store bunker oil in the Singapore Strait will total 18-20 by July, compared with 14-16 in the first quarter of this year, according to oil analysis firm Kpler. I was.

HSFO stocks, estimated at about 1 million tonnes, increased in July, nearly doubling compared to January, adding to total floating fuel oil stocks, according to Kpler data.

“The likely return of the increasingly shunned Russian fuel oil to eastern Suez could lead to more floaters arriving in the Strait,” said Jane Xie, senior oil analyst at Kpler.

South of Singapore, the 70-mile (113-kilometer) long strait lies between the Straits of Malacca and the South China Sea.

 

Inquiries about floating storage capacity along the strait increased after the war between Russia and Ukraine began in February, supporting shipping rates, market sources said.

There was demand to store Russian oil and other types of oil used in blends, they added.

While Asia has yet to receive a significant influx of Russian bunker oil, some buyers remain wary of buying oil directly from Russia, so some quantities will be shipped from ships before heading east. It has been moved to another place by moving to a ship.

Common locations for blending and re-exporting Russian oil include the Middle East trading hub of Fujairah and other ship-to-ship locations in the Mediterranean and the West, such as Amsterdam-Rotterdam-Antwerp (ARA). said the source.

 

Based on Refinitiv estimates, monthly Russian fuel oil supplies to Asia rose from 510,000 tons before the invasion to an average of 627,000 tons after the invasion.

 

Evolving Trade Flows

Refinitiv vessel tracking data shows that more Russian bunker oil has flowed into Fujairah since May, and some of these barrels are likely to be re-exported.

 

Yo Yang Chong, director of Refinitiv Oil Research in Asia, said: “HSFO continues to fall as the market is flooded with homeless Russian barrels stored in unlicensed commercial warehouses. probably,” he said, adding that Russian HSFO exports to Fujairah surged in July.

 

Fujairah has received more than 2 million tonnes of fuel oil from Russia so far this year and is expected to exceed 1.7 million tonnes in 2021, according to Refinitiv data.

 

Yeo said most of these casks have yet to find their way from Fujairah to Asia as they need to be further blended.