The trade of Russian oil for March-loading in Asia has slowed significantly as a growing gap between buyer and seller expectations in China has emerged. This disconnect comes amid rising costs for
The trade of Russian oil for March-loading in Asia has slowed significantly as a growing gap between buyer and seller expectations in China has emerged. This disconnect comes amid rising costs for chartering non-sanctioned tankers following new U.S. sanctions, according to traders and shipping data.
Fresh sanctions imposed by Washington on January 10 targeting Russia's oil supply chain have caused tanker freight rates to surge. Many buyers and ports in China and India are avoiding ships affected by the sanctions, further complicating trade.
Offers for Russian ESPO Blend crude—exported from the Pacific port of Kozmino—have jumped to premiums of $3-$5 per barrel over ICE Brent on a delivered ex-ship (DES) basis to China. This increase follows a dramatic rise in Aframax tanker freight rates, which have surged by millions of dollars, according to three traders familiar with the market.
Impact of Sanctions on Pricing and Demand
Before the January sanctions, strong winter demand and higher prices for competing Iranian grades had pushed spot premiums for ESPO Blend crude in China to nearly $2 per barrel. This marked a significant recovery from the discounts of up to $6 per barrel seen after the Ukraine war began in 2022.
In India,
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