US sanctions targeting Chinese oil infrastructure and Russian energy firms have significantly reduced flows of Russian and Iranian oil into China, the world’s top oil importer, with Chinese seaborne imports of Russian crude potentially dropping by two-thirds. This shift follows sanctions on major Russian oil producers and a key Chinese port, impacting Iranian shipments as well. While state-owned Chinese refiners have paused purchases, smaller private refineries are also showing caution, influenced by EU and UK blacklistings, resulting in a glut of unsold oil and lower prices. Despite the slowdown, some ports and traders are circumventing restrictions through practices like ship-to-ship transfers, suggesting that the impact may be temporary.
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According to Vladyslav Vlasiuk, Ukraine’s Commissioner for Sanctions Policy, sanctions against Rosneft and Lukoil imposed by the US and UK, and Rosneft by the EU, could drastically impact Russia’s oil revenue. These sanctions may cause Russia to lose over half of its oil exports to India and China, potentially costing them approximately $100 billion annually. The enforced restrictions could lead to a loss of 60-70% of oil exports, which translates to a monthly loss of at least $5 billion, representing roughly half of Russia’s current oil revenue.
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Russia’s oil smugglers are running out of ocean as UK freezes 100+ shadow fleet tankers, a situation that marks a significant escalation in the international effort to curb Moscow’s ability to finance its war in Ukraine. It’s excellent news, really. The aim is to pile on more sanctions, aiming to cripple Russia’s ability to fund its military operations. It’s heartening to see other countries potentially joining the movement. The strategy appears to be multifaceted, encompassing specific ships and the broader financial networks supporting them.
The approach seems to be targeting these so-called “grey fleet” vessels, which have been operating with little to no oversight, making it harder to track their movements and ownership.… Continue reading
The imposition of new US sanctions on January 10th caused a significant increase in tanker freight rates for Russian oil, disrupting trade between Russia and its major Asian buyers. This surge in costs, coupled with buyers’ avoidance of sanctioned vessels, created a substantial price gap, effectively halting March deliveries of Russian ESPO Blend crude to China and India. Consequently, the volume of Russian oil offered to these countries has dropped dramatically, impacting both nations who had previously become significant importers of Russian oil. This disruption underscores the sanctions’ impact on the global oil market and Russia’s ability to export its oil.
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Three tankers carrying over 2 million barrels of Russian ESPO crude are idling off the coast of eastern China, unable to unload their cargo. This delay follows the US imposition of new sanctions on major Russian oil companies and associated entities, including ship insurers. The impacted vessels, Huihai Pacific, Mermar, and Olia, were scheduled to offload at Shandong ports but were refused entry following a directive from Shandong Port Group. These actions represent a significant escalation in efforts to restrict Russian oil exports since the Ukraine invasion.
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John Q. Hosedrinker 
Matt Underwood