Millions of Russian oil barrels risk being stranded at sea due to US sanctions
Millions of barrels of Russian oil may be stranded at sea due to US sanctions (photo: Getty Images)
About 48 million barrels of Russian oil may end up stranded at sea due to US sanctions, and dozens of tankers will eventually be forced to seek alternative destination ports, Bloomberg reports.
According to the agency, Indian refineries are seeking alternatives to Russian oil by booking tankers for cargoes from the Middle East, while traders are closely monitoring the end buyers of crude from Lukoil and Rosneft that are already at sea.
"Russian export flows are holding up, but it's not finding its way through to their destinations yet," said Warren Patterson, Head of Commodities Strategy at ING Groep NV.
Data from analytics firm Kpler shows that about 48 million barrels of Rosneft and Lukoil crude, mainly Urals and ESPO grades, are currently in transit or beginning to load. This represents roughly 50 tankers heading to China and India, as well as to smaller ports scattered from the Baltic to the South China Sea.
It is noted that China and India are wary of falling under potential secondary sanctions, as the United States increases pressure on any actor facilitating Russian exports. The extent of these restrictions and Washington's willingness to enforce them will determine how much oil reaches refineries.
Major state-owned refiners in China halted purchases of ESPO crude after US sanctions targeting Rosneft and Lukoil.
At the same time, some private refineries, typically more risk-tolerant when buying sensitive oil, have also recently avoided this grade from Russia's Far East.
Additionally, after the announcement of US sanctions against Lukoil and Rosneft, several European countries hosting Lukoil-owned refineries began looking for ways to avoid shutting down their plants.
