Thursday, June 26, 2008

The Price of Fuel Keeps Ships at the Pier

According to the Commander of the Northren Fleet H. Maksimov, ships and submarines of the Northern Fleed are ready for deployment to the far reaches of the world ocean.

"This will be the Atlantic, Mediterranean, Indian and Pacific Oceans. Training will take place under the direction of the Supreme Commander," the Admiral said in a conference with a correspondent from the "RosBalt" news service.

But will these plans come to nothing taking into account the cosmic takeoff of the price of oil?

Daily demand for fuel and POL for a destroyer or large ASW class ship is about 100 tons (the optimal-minimal figure). Thus, the daily expenditure of fuel for a six ship task force (three warships and three support ships) taking into account the functioning of support equipment can reach thousands of tons. It is not difficult to translate this into monetary expenditure, figuring that diesel costs 18 thousand rubles/ton (lubricants 20 percent less). One day of a task force at sea costs the Navy around 15-20 million rubles - just for fuel....

But this is far from all the expenditures: modern conditions demand shipborne aviation to complete the commander's missions. A helicopter demands around a half a ton of aviation kerosene/hour flight.

Aviation kerosene in Russia costs around 1380 dollars/ton today in Russia and in North-West Europe - 1270 dollars. World aviation kerosene prices have doubled in the last year, although in the West it has begun to fall in May, but in Russia, this hasn't happened. Right now (19 June, 2008) kerosene costs 6.2 percent less in Heathrow than in Moscow and in Dubai - 8.1 percent less.

The Navy will have to allocate a large sum of money for fuel to perform training during a three month deployment which, evidently, significantly differs from the sum which was calculated at the beginning of planning.


If the situation in the world oil market doesn't stabilize, then the plans for Russian military vessels to deploy on the world oceans will look more and more problematic and protecting national shipping against piracy and maritime armed conflict will again have to be put off into the indeterminate future.