Chinese and Indian oil refiners will supply more oil from the Middle East, Africa and America, which will lead to higher prices and transportation costs amid the introduction of new US sanctions against Russia, which will limit supplies to Moscow's main customers. Reuters reports UNN.
On Friday, the US Treasury Department imposed sanctions against Russian oil companies Gazprom Neft and Surgutneftegaz, as well as 183 ships that supplied Russian oil.
Many of the tankers were used to deliver oil to India and China, as Western sanctions and the price cap imposed by the Group of Seven countries in 2022 have led to a shift in Russian oil trade from Europe to Asia. Some tankers also carried oil from Iran, which is also under sanctions.
Two Chinese trade sources said that Russian oil exports will be severely affected by the new sanctions, which will force Chinese independent refiners to cut back on refining.
Among the vessels under the new sanctions are 143 tankers, which last year transported more than 530 million barrels of Russian oil, which is about 42% of total oil exports by sea, according to a note by Matt Wright, a leading freight analyst at Kpler.
US sanctions imposed on major russian oil companies: details10.01.25, 18:46 • [views_33393]
Of this, about 300 million barrels were shipped to China, and most of the rest of the oil went to India, he added.
“These sanctions will significantly reduce the fleet of ships available to deliver oil from Russia in the short term, leading to higher shipping rates,” Wright said.
According to a Singaporean trader, over the past 12 months, these tankers have been supplying China with about 900,000 barrels of Russian oil per day.
In the first 11 months of last year, Russian oil imports to India increased by 4.5% year-on-year to 1.764 million barrels per day, or 36% of total Indian imports. Chinese imports, including pipeline deliveries, increased by 2% over the same period and amounted to 99.09 million metric tons (2.159 million barrels per day), or 20% of total imports.