Sanctions Against Russia Created Record Oil Logjam: Almost One Billion Barrels at Sea

Problem of Oil Accumulation in Tankers on the Global Market

According to hvylya.net: There is an unprecedented accumulation of crude oil in tankers at sea on the global oil market, reaching nearly 1 billion barrels. This phenomenon, known as 'floating storage', is a direct indicator of stress and significant inefficiency caused by Western sanctions against Russia and Iran, reports Bloomberg.

Since the end of August, floating oil stocks have increased by approximately 40%, with almost all of the increase coming from crude oil from Russia, Iran, Venezuela, or countries of uncertain origin. The main reason for this logjam is the use of a shadow fleet of old tankers and workaround routes being used by countries under sanctions.

Consequences of Oil Accumulation at Sea

'The accumulation [of oil at sea] is extremely large and is not happening because there is no demand, but because sanctions against Russia and Iran create logjams and bottlenecks in the global supply system,' notes Bloomberg.

Sanction restrictions force Russian and Iranian exporters to use a shadow fleet of opaque and old vessels. These ships often choose longer routes to avoid monitoring and checks, resulting in increased transit times and capacity constraints for oil transportation.

The overloaded tanker fleet is incurring record costs - over $100,000 per day for a single vessel. In October, tax revenues from oil in Russia fell more than 24% year-on-year.

The accumulation of oil in tankers worldwide indicates stress and inefficiency caused by sanctions against Russia and Iran. The use of a shadow fleet and workaround routes has led to a serious oversupply situation, significantly impacting the global market and tanker industry.