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Zero Hedge
ZeroHedge
4 Mar 2025


NextImg:Russia Struggles To Offload Oil Cargoes Due To US Sanctions

Authored by Charles Kennedy via OilPrice.com,

Tankers continue to load crude oil from Russia but many of these are seeing difficulty in delivering the cargo to ports as buyers avoid supply chain sanctioned by the United States, according to data compiled by Bloomberg.

The Biden Administration’s farewell sanctions on Russian oil trade were the most aggressive yet and sanctioned dozens of vessels that Russia used to ship the ESPO crude blend from the Far Eastern port of Kozmino to China’s independent refiners. Many of the vessels, specialized tankers, and shuttle tankers transporting Russia’s oil from the Arctic and Far East Pacific fields and production clusters to Asia have now been sanctioned.

The sanctions on Russia, as well as the tightening sanctions on Iran’s shadow fleet, have prompted a run on non-sanctioned vessels, with daily rates doubling and even tripling in the past month.

Russia appears to be prioritizing deliveries to China and has been reshuffling its tanker fleet to service the Russia-China route at the expense of India, vessel-tracking data analyses have shown in recent weeks.

Of the 19 vessels loaded from the Sakhalin Island in Russia since the U.S. sanctions came into effect, only five have delivered their cargoes to a final port of destination, according to data reported by Bloomberg’s Julian Lee.

Similar cargoes from Sakhalin spent only about a week at sea previously. Now some tankers have been at sea for nearly two months, per tanker-tracking compiled by Bloomberg.

Deliveries from Russia’s Arctic projects are also being delayed by weeks as India steers clear of sanctioned tankers while China and India are working to reshuffle the supply chain and use tankers, traders, and insurers that are not subject to U.S. sanctions.

China’s sanctioned oil imports have started to rebound in recent weeks as supply chain adaptations take hold, Emma Li, senior market analyst at Vortexa, said last month.