Russian Ex-Baltic Aframax Urals netbacks weaken as freight rates surge


A sharp rise in freight rates for Aframax cargoes loading in the Baltics and steaming to the UK-Continent coupled with a falling Urals CIF-Rotterdam assessment has helped send the FOB Urals Ex-Baltics market to its lowest value versus dated Brent since April 21, S&P Global Platts data showed.

FOB Ex-Baltics Aframax Urals cargoes were assessed at a $2.665/b discount to the Mediterranean Dated Strip Tuesday, down 37.5 cents/b day-on-day.

Platts assesses FOB Novorossiisk Aframax cargoes as a freight netback to the CIF-delivered Rotterdam Urals market, using the Baltic to UK-Continent 100,000 mt freight route to calculate the Urals value back to its loading point at the Russian Baltic ports of Ust-Luga and Primorsk.

The CIF-Rotterdam Urals assessment came under pressure as sources said some buyers were still waiting to see the full June program which left some of the more prompt barrels available.

In addition, Surgutneftegaz tendered four cargoes of Urals loading out of the Baltics — all loading between June 2-10 — Monday and Tuesday which added to the supply balance at the prompt end of the Mediterranean Strip.

The Baltic to UK Continent Aframax route, basis 100,000 mt rose to Worldscale 100 Tuesday, up w22.5 from Monday. This is the highest level seen on the route in two months since it was assessed at w100 on March 24, according to S&P Global Platts data.

Charterers started marketing June-dated stems leading to tighter tonnage and there was also an increasing volume of fuel oil being quoted, which took out available tonnage.

The Mediterranean Aframax market has also been very strong for the last week and this has fueled bullish sentiment amongst owners.

Worldscale rates had previously been weak because ice-restrictions were lifted in April and Baltic cargoes from Ust-Luga and Primorsk were seeing competition from both ice-class and non ice-class tonnage, sources said.
Source: Platts



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