Freight on the Danube may increase after the government’s decision to prioritize oil exports

After the government’s decision on priority for oil exports, freight rates on the Danube may increase.

This was reported by Avalon Shipping Operations Manager Kateryna Kononenko.

According to her, market participants are already contacting shipping agents with questions about the new decision of the Ukrainian government. At the same time, as far as Kononenko knows, the relevant decision has not yet entered into force, and agents have not yet received official instructions on the priority passage of vessels with vegetable oil through Danube ports.

Even if the new rules are introduced, Kononenko does not expect a significant impact on the grain market.

At the same time, the very reports of possible changes can already affect the behavior of market participants and additionally push freight rates up.

“Rumors in our market spread quickly — sometimes faster than ships pass Sulina,” Kononenko noted.

In her opinion, weather conditions and restrictions on vessel draft are currently having a much greater impact on the work of the Danube route.

In particular, fog can limit navigation and reduce the actual operating time of the Sulina Canal.

Kononenko also drew attention to the discrepancy between the parameters of some nominated vessels and the actual restrictions on the Danube. According to her, vessels with a draft of about 7 m continue to be nominated from Reni, while the Romanian administration has published updated data, according to which the maximum draft in the section between the 44th mile and Galati is 6.7 m.

It will be recalled that the other day the Cabinet of Ministers introduced a temporary priority for the transportation and export of Ukrainian vegetable oil by rail, through sea and river ports and the state border. In particular, in ports, vessels arriving to load oil in bulk for export will be given priority at berths. Such vessels willalso receive priority when organizing passage through the Sulina Canal.