Russia Reshuffles Tankers to Keep Shipping Oil to China after US Sanctions

Aframax oil tankers that serviced crude oil exports from Russia’s western ports are now being redirected to the Russian Far East-China route to service the exports of Russia’s ESPO crude, a favorite with Chinese refiners, Bloomberg reports, citing shipbroker and ship-tracking data.
The Biden Administration’s final 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 its Far East 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. This put around 1.5 million bpd of Russia’s crude flows from its Pacific and Arctic ports at risk, according to a Bloomberg analysis of the tankers now designated by the U.S.
Some 70% of the oil tankers that Russia used to ship crude from Kozmino have been slapped with sanctions, per Bloomberg’s estimates.
This has likely prompted Moscow and the traders it works with to withdraw tankers servicing the western Russian ports of Primorsk, Ust-Luga, and Novorossiysk and redeploy them on the Far East-China routes.
The freight rates for shipping ESPO crude on the Kozmino-East China route have tripled since the U.S. sanctions were announced on January 10.
At least two oil tankers that previously transported Russian crude from the western ports are now on the Kozmino-China route, according to the vessel-tracking data Bloomberg has compiled. Both these tankers are owned by companies based in Hong Kong, but it is unknown whether the ultimate owners are Russian.
Following the latest U.S. sanctions, supertanker rates doubled in a week and pushed up the cost of hiring Aframaxes and Suezmaxes, too.
Fleet capacity to service Russian exports is expected to tighten significantly, according to Mary Melton, a freight analyst at Vortexa. The most likely scenario for Russian crude exports going forward is that they will most likely face serious logistical difficulty due to the lack of available tonnage, according to Vortexa.

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