The freight rate for hauling Russian ESPO crude from the Far Eastern port of Kozmino to North China soared following Moscow’s invasion of Ukraine on Feb. 24, tanker market sources said March 2.

According to latest shipping fixtures, the lumpsum freight for chartering an Aframax-class tanker on the Kozmino to North China route is being reported in the $825,000 to $850,000 range, which is almost double the last done fixture.

While many market participants are taking a wait-and-see approach in concluding tanker fixtures on this route, two fresh trades were widely reported with Chinese charterer ChemChina provisionally hiring the Mandala basis March 12 laycan for shipping 100,000 mt of ESPO Blend crude at $825,000.

Another reported fixture involved Chinese charterer Unipec placing the Kriti Verano on subjects for March 10 laycan at $850,000.

Since Russia started its military operations in Ukraine, market participants paused to assess the legal, financial, administrative, and operational implications involved in loading Russian crude.

Tanker market watchers said that owners were earlier reluctant to make any offers on their tonnage for this particular business, while the market continued to look for clarity regarding the trade out of Kozmino. The sources added that a few owners, after obtaining permissions from their internal compliance teams, began making offers which commanded high premiums for loading ESPO Blend crude.

Given that currently two non-Russian owned Aframaxes have been placed on subjects for loading out of Kozmino, sources said, other owners, too, may consider offering their ships for this trade.

“With good earnings [being seen] on this route, there will be owners who can consider [Kozmino cargoes],” a charterer based in the Far East said.

“[One] still needs to see if [there are] any issues on these shipments,” an Aframax owner added.

A shipbroker said there are still other owners who are refusing to touch Russian crude cargoes given the current situation.

With March and April EPSO crude trading cycle completed, market sources said the attention is now on the May trading cycle.

The Chinese independent refiners, who favor the Russian ESPO Blend crude, have decided to halt their purchases until there is more clarity on the implications of banking sanctions. Some of China’s top state-owned banks are taking precautionary measures and have stopped issuing Letters of Credit for trading, or purchasing, of Russian commodities, S&P Global Commodity Insights earlier reported.

Source: Platts