Slide 31. I have promised you more maps. These are not specific embargo voyages now, but I believe this map as well in visualizing very simply the ton-mile impact related to the EU cargo. The red arrows show two trade lanes, basically how Russian oil products used to get shipped to the European market. Baltic to Northern Europe on top, and below, Black Sea to the Mediterranean Sea. Of any voyages that MR tankers would ever engage in these are among the shortest by far. Contrast, if diesel gets shipped to Europe from the U.S., the green arrows towards the left here, we are looking at voyages 4 times as long, at least 5 times as long from the Middle East, 10 times as long from the Far East. I said earlier, this is an evolving situation, and we are in the first week since the ban came into effect.
But many traders booking ships loading in Houston nowadays ask for discharge options in Poland. That is new. It really confirms the point that slide is trying to make, which is from short runs in Northern Europe to quadruple the voyage length from Houston to Eastern Europe. Ton-mile impact overall is estimated at between 7% to 8%. So where is all the Russian diesel going now? Slide 32. The expectation is that it will move fairly long haul that we will see a fair bit of flow into South America and long-haul voyages replacing short-haul voyages. We’re already seeing today Russian Baltic cargoes moved to North Africa and West Africa, also long haul, prone for voyage delays. These deals are generally done under the radar by the so-called shadow fleet, but we are keeping a close eye on this activity.
Most importantly, remember, this is cheap diesel. And voyage distance is almost irrelevant in the face of price arbitrage. Oil analysts have been predicting that even markets East of Suez will be absorbing Russian diesel. India, the Middle East and Asia might all be importing diesel all the way from Russia, and as of this week, we are starting to see exactly this happening. We are seeing CPP cargoes from the Baltic getting booked for East of Suez discharge on both MRs and LRs. This can either be for consumption or Russian diesel will get blended with other products and then get re-exported. This is a remarkable two-way trade. Same cargo is shipped twice over really long distance, west to east and then back east to west. By the way, not by the same ships.
Allow me to clarify that Ardmore does not engage in Russian exports, but we are monitoring what the shadow fleet is doing. And the expectation is clearly that many of these vessels are €“ not all of them, will not be able to slot back into international mainstream trades afterwards. This would create further market inefficiencies and limited tonnage availability in the market even further. Turning to Page 33, the industry outlook. Much of this will be familiar to you and I also regret to inform you that we only have one map left in the slide deck. You’re a very kind audience. Thank you. This is also a very small map. Slide 34, a simple story, but very important. Net fee growth for product and chemical tankers is slowing substantially, even expected to turn negative in the foreseeable future, against an estimated 3.5% annual demand growth.
