Photo: Gety images
China and India have suspended trade in Russian oil after new US sanctions caused a significant increase in the cost of tanker transport. This is reported by Reuters.
According to traders and shipping companies, Russian oil loaded in March is currently not finding buyers in China due to a sharp price gap between suppliers and consumers. The reason for this was the increase in freight rates for tankers not subject to US sanctions.
Washington imposed new restrictions on 10 January, which increased the cost of transporting Russian oil, forcing Chinese and Indian importers to avoid sanctioned vessels.
In particular, the price of ESPO Blend crude oil exported from the Pacific port of Kozmino increased by USD 3-5 per barrel compared to ICE Brent. This is due to the fact that the freight of Aframax tankers on this route has risen by several million dollars.
Nevertheless, demand for ESPO Blend crude oil was growing before the sanctions were imposed, driven by winter needs and higher Iranian oil prices, which increased premiums to USD 2 per barrel.
India reduces imports of Russian oil
The Indian company Bharat Petroleum Corp Ltd said that in January it did not receive any offers for the supply of Russian oil in March. The company expects a significant reduction in supply volumes compared to previous months.
Last year, Russia accounted for 36% of India’s oil imports and about 20% of China’s imports. However, recent sanctions, which have affected approximately 42% of Russia’s maritime exports, have significantly hampered trade.
The United States has given India until 27 February to unload tankers with Russian oil that are already at sea. Payment for such supplies is due by March 12, Indian Oil Minister Pankaj Jain said.
