Nearly five million barrels of Sokol grade crude oil from Russia is languishing en route to Indian refiners, caught in a sanctions trap for a month, Bloomberg News reported on Wednesday.
According to Bloomberg, citing tanker tracker data, one tanker, the NS Century, remains stuck near Sri Lanka due to U.S. Treasury Department sanctions on the vessel. Now, two other tankers, both owned by Sovocomflot, are stuck in the same place. All three tankers are carrying Russian Sokol grade crude.
Bloomberg suggests that the tankers are stuck due to the G7 price cap imposed on Russian crude, though this has not been independently confirmed.
In November, Reuters reported that India's top refiner, Indian Oil Corp., had purchased a cargo ol Sokol for November delivery. At that time, Reuters said it signaled that output from Russia's Sakhalin-1 project was potentially recovering in the wake of Exxon Mobil's exit.
The price cap set by the G7 and the EU says that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling. The measure took effect at the end of 2022 when the EU imposed an embargo on imports of Russian crude oil.
In mid-November, the European Union said it was considering tighter sanctions on Russian oil due to the fact that virtually none of the sanctioned crude was trading below the price cap ceiling.
Throughout the course of 2023, Russia has significantly increased crude oil exports to both India and China.
According to pipeline monopoly Transneft, Russian volumes of crude to China reached 2 million barrels per day this year. Russia says it has exported 100 million tons of its crude to China this year and 70 million tons to India.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More
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