Attacks on Russia’s Baltic oil infrastructure spark replacement cargo scenarios

Potential replacement cargoes

According to AXSMarine, these disruptions divide the tanker market into two tiers, potentially shifting cargoes from the sanctioned to the non-sanctioned fleet, creating demand for the latter.

“Crude oil from Primorsk and Ust-Luga must be replaced. India and China cannot forgo these volumes. The replacement sources – US Gulf, Latin America, West Africa – entail significantly longer voyages, with vessels routeing via the Cape of Good Hope (COGH) due to the closure of Hormuz and Red Sea risks,” Mr Zannikos explained.

Notably, a round-trip voyage from Ust-Luga to India on an Aframax tanker takes 52 days, whereas a Suezmax travelling from the US Gulf to India via the COGH is estimated at 84 days. “Each replacement barrel ties up a vessel for 32 extra days. Same barrels, longer journey, more ships absorbed,” he said.

In the petroleum products market, with Middle East Gulf refineries unable to export via Hormuz, replacement sources narrow to the US Gulf, Latin America, and the broader Atlantic Basin. “On the short Baltic run, products moved on MR2s. On the far longer COGH replacement routes, economics force both dirty and clean products onto LR1s and Aframaxes – the vessel class upgrade is driven by route length, not cargo type,” Mr Zannikos noted.

Supply caveats

However, AXSMarine cautions that these gains assume full barrel-for-barrel replacement from Atlantic sources. 

“If global production cannot ramp sufficiently – and with OPEC+ spare capacity largely trapped behind Hormuz – the replacement volumes may fall short. In that case, the per-barrel tonne-mile multiplier still applies, but total fleet absorption is proportionally lower. Our scenarios, therefore, represent the upper bound of demand impact; the actual outcome depends on the supply response,” he explained.

Waiver giving life to exports

Meanwhile, Russian oil exports appear to be rising, largely due to a US waiver allowing stranded at-sea cargo to move.

AXSMarine data shows total crude and product exports opened 2026 at approximately 5.5M b/d, rose to around 6.0M b/d through week 8, dropped sharply below the five-year minimum between weeks 8 and 10, and then rebounded past 6.0M b/d, approaching the five-year maximum. “It is not a recovery. It is a drawdown,” Mr Zannikos said.

Russian floating storage surged through late 2025, peaking at roughly 20-22M barrels in January 2026, concentrated in the North West Pacific and the UK-EU Continent. From February onward, stocks collapsed to around 5.5M barrels. 

“The trigger was a 30-day US sanctions waiver, allowing countries to buy Russian oil already loaded on tankers,” Mr Zannikos explained. “Indian buyers, hit hardest by the loss of nearby Gulf supply, moved first,” he added.

“This buffer is finite – and it has an expiry date. The sanctions waiver applies only to Russian oil loaded onto vessels by 12 March and expires on 11 April. After that, any remaining floating Russian barrels revert to sanctioned status. The current recovery in exports is borrowing from the future, not preventing the decline,” Mr. Zannikos noted.

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