The cost of shipping Russian ESPO oil to China has more than tripled after the US imposed aggressive sanctions on Moscow's oil industry last week, and traders say rates are expected to rise even further, Bloomberg reports, UNN writes.
Details
Bids to ship ESPO crude oil from the port of Kozmino on Russia's east coast to China jumped to $5-5.5 million on Monday, up from $1.5 million before the sanctions, traders familiar with the route said.
The United States has expanded sanctions on tankers, targeting two Russian companies that handle more than a quarter of OPEC+ countries' maritime exports, as well as insurers and traders. According to the International Energy Agency, the fleet of blacklisted vessels transported about 22% of crude oil shipped by sea in 2024.
The sanctions had an immediate impact on vessels carrying ESPO and another Russian grade, Sokol, which are idle off the coast of China, according to ship tracking data. The ESPO grade was a favorite of Chinese refineries because of its short shipping distance.
Most of the tankers plying the route between Kozmino and China are Aframaxes, which can carry 750,000 barrels, the newspaper writes.
Even before the latest U.S. sanctions, ports in Shandong province were wary of accepting sanctioned tankers after a warning from a major terminal operator. Shandong is home to most of China's independent refineries.
Oil falls in price after hitting a multi-month high: what's happening on the market16.01.25, 13:53