Russia experienced a massive explosion in the early hours of the morning.
On January 21st, according to TASS, Yuri Zapalatsky, the district chief of Jinjishep District in Leningrad Oblast, Russia, stated that "at 2:45 am on the 21st, Leningrad Governor Alexander Drozchenko called to say that the Novatek company in Ustiluga Port had two explosions in the early morning of that day." Ustiluga Port is the largest port in the Baltic Sea, Novatek, the largest liquefied natural gas exporter in Russia, is responsible for the distillation and transportation of liquefied natural gas at its factory in the port.
In response, the Ukrainian National Security Agency stated that in the early hours of the 21st, the Ukrainian national security department launched a special operation on a dock in Ustyluga Port, Leningrad Oblast, Russia, using drones to attack the area, which triggered a fire. The Ukrainian military's operation aims to disrupt the Russian military's fuel logistics.
In addition, the international crude oil market is also facing a huge transportation crisis. After the intensive airstrikes on the Hussain armed anti-ship missile base by Britain and the United States, the Hussain armed forces threatened to retaliate against British and American merchant ships. According to industry insiders, nearly 9 million barrels of oil in Saudi Arabia and Iraq may face transportation delays due to a large number of oil tankers urgently changing lanes. Global shipping giant Maersk has warned that the global shipping network may collapse due to the increased risk of the Red Sea.
Sudden explosion at Russian port
On January 21st, citing TASS news agency, Yuri Zapalatsky, the district chief of Jinjishep District in Leningrad Oblast, Russia, said that the fire that occurred in the Ustyluga Port in the district was caused by two explosions.
According to reports, Zapalatsky stated on the "Telegram" software that "at 2:45 am on the 21st, Governor Alexander Drozchenko of Leningrad called to say that two explosions occurred at Novatek Company in Ustiluga Port that morning. At 3am, the state government held a meeting of the security command center and made a decision to enter a high alert state."
He said that Novatek is currently carrying out fire control and firefighting work. Zapalatsky said, "At the time of the explosion, there were a total of 148 people inside the company's facilities, but there were no casualties, and the situation was completely under control."
Ustiluga Port, located in the Gulf of Finland, is the largest port in the Baltic Sea and includes multiple docks and factory facilities. Novatek's factory in the port is responsible for fractionation and transportation of liquefied natural gas.
According to Reuters, Novatek, Russia's largest liquefied natural gas exporter, stated on the 21st that the explosion that occurred at the Baltic port of Ustyluga on the same day was caused by "external factors".
This port is located approximately 110 kilometers west of St. Petersburg, near the Estonian border.
According to a report by Global Times citing Ukraine's national news agency on the 21st, the Ukrainian National Security Agency stated that in the early hours of the 21st, the Ukrainian national security department launched a special operation on a dock in Ustyluka Port, Leningrad Oblast, Russia. They used drones to attack the area, causing a fire and forcing personnel to evacuate. The Ukrainian military's operation aims to disrupt the Russian military's fuel logistics.
9 million barrels of oil urgently needed
The joint British and American forces launched airstrikes on the Houser armed anti-ship missile base for the second consecutive week, but failed to provide the necessary deterrence. The Houser armed forces continued to attack the Red Sea merchant ships.
The Houser armed forces even threatened to retaliate against British and American merchant ships. A large number of shipowners, brokers, and traders have urgently stated that oil tanker leases carrying crude oil and fuel oil indicate that more and more ships are avoiding this dangerous sea area.
According to Dutch International Group, after mid December 2023, about 80% of container ships on the Red Sea Suez Canal route were forced to change their routes, reaching 90% by early January this year.
According to industry insiders, nearly 9 million barrels of oil in Saudi Arabia and Iraq may face transportation delays due to a large number of oil tankers urgently diverting around the Cape of Good Hope in Africa. Among them, at least two ships carrying nearly 3 million barrels of Saudi crude oil and refined oil in total may be delayed in transportation after being loaded into the Persian Gulf this month. Five other oil tankers carrying up to 6 million barrels of Iraqi crude oil are also redirecting from the Red Sea.
Ship tracking data shows that these ships, which loaded crude oil and refined oil from the ports of Ras Tanura and Jubail in Saudi Arabia and Basra in Iraq this month, have urgently changed their routes and departed from the Mand Strait at the entrance of the southern Red Sea. Most of these ships changed their routes on or after January 12th.
It is worth noting that the crude oil production in the Middle East accounts for about one-third of the world's total production. After Europe basically cut off energy imports from Russia, crude oil in the Middle East became increasingly important to Europe.
According to CCTV Finance, data shows that the amount of Middle Eastern crude oil shipped to Europe is continuously decreasing. The export volume in December 2023 was approximately 570000 barrels per day, almost halving from the 1.07 million barrels per day in October 2023, which will have an impact on European energy supply.
Some market participants have indicated that there is currently a large amount of Iraqi crude oil cargo, which is scheduled to travel from the Persian Gulf to Europe, bypassing the Cape of Good Hope in Africa.
In terms of freight costs, in recent weeks, the freight rates of different types of oil tankers have been continuously increasing.
Since mid December 2023, the freight rates of Aframax tankers (capable of carrying 700000 barrels of crude oil) have more than doubled, reaching nearly $80000 per day; The freight rate of Suez tankers (the largest ship type transported through the Suez Canal, capable of carrying 1 million barrels of crude oil) has increased by about 50%, reaching nearly $70000 per day.
"The problem that originally appeared to be solvable in a few weeks may now affect for several months," said Alexander Savills, CEO of Euronav NV. The transportation capacity of the company's fleet can exceed 50 million barrels of oil.
In addition, global shipping giant Maersk warned in a memo to clients that the global shipping network may collapse due to the rising risk of the Red Sea.