A large fleet of tankers used to export Russian crude oil is being grounded due to increased U.S. sanctions on the Russian oil market, Bloomberg reports.
Nearly half of the 50 tankers sanctioned by the U.S. Treasury Department in October have not loaded cargo since appearing on tracking sites.
The leader of the NS Sovcomflot, the latest casualty, was reportedly forced to turn back off the coast of Portugal on its way to a Russian port in the Baltic after its owner was hit with US sanctions.
According to Bloomberg, 14 tankers carrying Russian Sokil oil to India were forced to anchor in waters east of Singapore. Many tankers were turned back without reaching their final destination.
In October, Washington imposed sanctions on the company for violating a price cap imposed by the United States, the EU, the Group of Seven (G7) and Australia in December 2022.
The group imposed a cap on Russian oil at $60 a barrel, mainly to limit Moscow’s revenue from offshore oil entering global markets.
Russia has found ways to avoid sanctions
Russia’s dependence on Western services, such as shipping insurance, initially gave the West leverage to impose price caps. This forced Moscow to provide discounts to customers.
However, reports suggest that Russia has found ways to more successfully avoid the upper price of $60 per barrel.
Moscow is said to have built a so-called “ghost fleet” of oil tankers that operate without Western insurance or other services, eliminating Western influence. According to the Financial Times, in August almost three quarters of Russian marine oil traveled without Western insurance.
Revenues from oil and gas exports make up about a third of Russia’s total budget and are important for supporting the Russian army.
Despite Russia’s strategy to reduce its dependence on Western transport services, the average value of Russian oil at the point of export appears to be trading at an increasingly lower price.
It is not known how much the Russian oil market has been affected by the industry’s evasion tactics, but tracking can easily confirm that many tankers are shutting down.
photo: Harshit Srivastava | Dreamstime.com
Source: Hot News
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