The latest round of US sanctions targeting Russia's oil industry has created ripples across the energy market, particularly benefiting oil tanker companies. With over 180 vessels associated with Russia's shadow fleet now sanctioned, the demand for compliant oil tankers has surged. This shift is expected to boost earnings for companies like DHT, CMB.Tech, and Frontline, as they fill the gaps left by the sanctioned vessels. Frontline CEO Lars Barstad previously noted that such sanctions could enhance earnings for crude-carrying vessels, a sentiment that is now playing out in the market.
The sanctions have also introduced uncertainties in global oil supply chains, contributing to a rise in crude oil prices. As the availability of Russian oil diminishes, the market is witnessing an increase in the price of alternatives, reflecting the constrained supply. This dynamic is further compounded by the increased shipping rates for compliant tankers, which are now in higher demand due to the sanctions.
As of 13:31 on January 10, the price of crude oil has climbed to $76.16, up from its last close of $73.92. The market's reaction underscores the significant impact of the US sanctions on both the oil and shipping sectors, with crude oil prices nearing the day's high of $77.86.