Middle Eastern and Asian companies are snapping up aging oil tankers to transport Russian crude as charter rates soar

• Tanker charter prices are sky-high for ships willing to transport Russian oil amid sweeping sanctions.
• Middle East and Asian buyers are opportunistically snapping up aging oil tankers to ship Russian fuel.

Sweeping sanctions, boycotts, and restrictions on Russian oil have spurred opportunistic profiteering — market entrants are now snapping up aging oil tankers to ferry the fuel at a premium rate.

New ship owners, predominantly from the Middle Eastern and Asia, are looking at sky-higher charter prices for tankers willing to transport Russian oil to India and China, Reuters reported on Monday. India and China are now major buyers of the fuel after the European Union kicked off its import ban on seaborne Russian crude on December 5.

"Ships earning $80,000 a day in the Mediterranean can make $130,000 a day if they carry Russian oil," an unnamed ship broker told Reuters. That's as crude tanker rates have soared this year to their highest level since 2008 — other than a brief spell during the pandemic in 2020 when oil companies used the ships for storage of excess supply as demand slumped, per Reuters' records.

The prospect of bumper profits has also sent the prices of second-hand oil tankers up sharply.

Prices for 20-year-old Aframaxes — the standard vessel size used for loading crude at Russian Baltic ports — have surged 94% from $11.4 million in January to nearly $23 million as of November 24, shipping data provider VesselsValue told Insider.

There have also been 161 Aframax sales so far this year — 5% more than the 153 sold in the same period in 2021, according to VesselsValue.

One China-based shipowner snapped up five Aframax tankers, Lloyd's List reported in August.

The buyer had spent a total of $376 million buying a total of 13 tankers in various sizes for ship-to-ship transfers of Russian crude oil in the Atlantic Ocean, according to the shipping journal. All the ships were at least 15 years old and most of them were purchased between May and July 2022.