New US sanctions against the Russian tanker fleet are already affecting not only oil prices
13 January 14:16
Three tankers with more than 2 million barrels of Russian oil are sailing in the waters off eastern China after the United States announced a new package of sanctions and these tankers were hit by them, according to ship tracking data. Bloomberg writes about this, Komersant ukrainskyi reports.
The Huihai Pacific vessel was due to arrive in Dongjiakou in Shandong province on January 15 after being loaded with nearly 770,000 barrels of ESPO crude oil in the Russian Pacific port of Kozmino earlier this month. This is according to data from Kpler, a company that specializes in collecting information on commodity markets. Over the weekend, the tanker changed course and is now anchored at sea with a cargo of oil.
The Mermar left the Russian port of Kozmino on January 5 with more than 755,000 barrels of oil and was supposed to call at the port of Yantai this week, but is now also waiting off the coast, according to Kpler. Another vessel, the Olia, left the Russian port on January 7 with nearly 709,000 barrels of oil and was also headed for Yantai, but is now in the Yellow Sea.
As Bloomberg notes, these tankers, along with many others, are subject to the most aggressive package of measures aimed at Russian oil exports since the invasion of Ukraine in early 2022.
Washington’s move comes just days after Shandong Port Group Co. which operates several ports in Shandong province called on terminals to stop allowing sanctioned oil tankers to dock or unload cargo.
According to analyst firm Kpler, the newly sanctioned tankers handled more than 530 million barrels of Russian crude oil last year, about two-fifths of the country’s maritime crude oil exports. More than half of this volume, or about 300 million barrels, was shipped to China.
What is the reaction of Russian oil consumers?
Refiners, tanker operators and port managers across Asia have been scrambling over the weekend to understand how the imposition of sanctions on Russia’s oil industry will affect oil supplies, and Bloomberg reports that they have been scrutinizing documents with lawyers and talking to government officials to understand the impact of the sanctions on major importers China and India. Government officials are preparing to negotiate with Washington to keep the flow of crude oil at reduced prices.
The publication recalls that these two countries – China and India – were the main beneficiaries of Russian oil at reduced prices after Russia’s invasion of Ukraine in early 2022. They were working around the price cap imposed by Western countries, which was intended to limit Russia’s profits from oil sales, but the increased penalties have wreaked havoc on this trade.
How the Russian ruble and oil prices react to the new sanctions
According to Reuters, the Russian ruble fell against the US dollar and the Chinese yuan on Monday. According to over-the-counter market data, the ruble fell by 0.7% to 102.45 against the dollar in the morning. The ruble weakened by 0.8% to 13.81 against the yuan during trading on the Moscow Stock Exchange.
Oil prices continued to rise on Monday morning. According to Reuters, the price of Brent crude rose above $80 per barrel to its highest level in more than four months. Futures for Brent crude rose by $1.20, or 1.5%, to $80.96 per barrel and reached the highest level since August 27, when the price was $81.49.
According to experts and traders, Russian oil exports will be severely affected by the new sanctions, which will force China and India to source more crude oil from the Middle East, Africa and America, raising prices and shipping costs.
