Latest round of US sanctions on Russia

BRS’ Weekly Tanker Newsletter was recently cited by TradeWinds, discussing the latest US sanctions on Russia: https://www.tradewindsnews.com/tankers/how-chinese-refiners-rejecting-direct-russian-oil-imports-will-reshape-tanker-trade/2-1-1764655

The most recent package of US sanctions on Russia targeted 183 vessels and a variety of industry players, notably energy producers Gazprom Neft and Surgutneftegas. Of those vessels, 153 are tankers. This significant move has boosted crude oil prices, but the full impact on shipping remains to be seen.

Receivers in China and India, the two largest importers of Russian crude, have already begun hesitating to discharge Russian crude directly into their ports, fearing secondary sanctions. Shandong Port Group has banned US-sanctioned tankers, and India will follow suit after a wind-down period ending 12 March 2025. This is likely to cause an increase in crude oil in transit and floating storage, which may cause freight volatility as these vessels discharge in waves.

Medium-sour Ural barrels may be replaced with barrels from the Middle East, Latin America, and Canada, while the loss of lighter, sweeter ESPO could increase demand on crude from WAF, Brazil, and the US. This should therefore boost mainstream tanker demand.

Although it seems tanker markets will be lifted by these sanctions, the impact is not likely to be immediate as these shadow vessels work in a largely separate market. Next week’s change in the White House will also influence how the aftermath of these sanctions plays out.

Please contact research@brsbrokers.com for more insights.