MOSCOW, July 18. /TASS/. The cost of transportation of oil from Baltic ports to northern China fell to $13.2 per barrel in June whereas in early 2023 it amounted to around $18 per barrel, with certain spot transactions reaching the price of $26-27 per barrel, Head of the Economic Department at the Institute for Energy and Finance Sergey Kondratyev said in an article for InfoTEK analytical center.

The Institute for Energy and Finance started assessing freight costs for Russian oil cargoes within Gazprombank’s Price Index Center project in January 2023. Assessments are based on surveys among Russian shipping companies and traders.

"June was the first month in 2023 when freight rates turned out below the psychologically important level of $13.5 per barrel ($100 per ton) even in extra-long directions: from the Baltic region to northern China - $13.2 per barrel, or $96 per ton). Of course, it is difficult to speak about ‘low’ rates now, with the Russian market having returned to the levels of last September-October so far," InfoTEK quoted Kondratyev as saying. Consequently, freight costs have decreased 1.4-fold since the beginning of the year.

A sharp rise in freight rates in early 2023 was related to the embargo on Russian oil imports and the 'price ceiling' imposed by EU countries in December 2022, due to which tankers’ supply fell, while ‘sanctions premiums’ increased, the expert said.

"However, same as in 2022, the market quickly adjusted to new conditions: the rates started declining as early as in March. The cost of transportation of Russian oil to western India from Novorossiysk currently stands at $6.8-7 per barrel, and $9.5-10 per barrel from Baltic ports," he added.

Kondratyev expects the freight cost to continue falling, "with the price of oil transportation from Novorossiysk to western India possibly equaling $6 per barrel as early as in the autumn." "Our optimism is connected with high tankers’ supply and with stable demand for Russian Urals on new markets. In early 2022 almost no one expected Indian refineries to swiftly adjust to refining Urals, whose content differs from that of commodities from Iraq and Saudi Arabia. However, now the share of Russian oil in India’s imports surpasses 45%, in refineries’ resources overall - 35%, whereas on certain plants it exceeds 80%," the expert explained.