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Another Sanctioned Russian Tanker Set to Offload Oil Cargo in China

A Russian tanker, sanctioned by the U.S. in the middle of February, has arrived at a Chinese port to discharge Russian crude in the province home to most of China’s independent refiners, Reuters reported on Wednesday, quoting shipping data from Kpler and LSEG.

The vessel Krymsk, owned by Russian state tanker company Sovcomflot, docked at the Chinese port Dongying on Wednesday, to offload 700,000 barrels of Russia’s Sokol crude grade, according to the data.

Sovcomflot was designated last month by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), which is looking to “responsibly reduce Russia’s revenue from oil sales.”

Together with Sovcomflot, the U.S. Treasury sanctioned 14 tankers, including Krymsk, as beneficially owned by Sovcomflot.

While it sanctioned Sovcomflot and 14 of its tankers, OFAC also issued a general license authorizing the offloading of crude oil or other cargo from these 14 vessels for a period of 45 days.

According to Reuters, Krymsk is the second sanctioned tanker that would be offloading crude at a Chinese port after the new sanctions. Last week, the Liteyny Prospect, also on the list of Sovcomflot’s 14 sanctioned tankers, discharged 700,000 barrels of Sokol crude at a Chinese port in the Hebei province.  

Last month’s sanctions and the increased sanction enforcement in recent months have resulted in lower imports of Sokol crude in India, whose refiners are wary of running afoul of U.S. regulations.

Stranded cargoes of Russia’s Sokol crude, previously headed to India but idled off South Korea and Singapore since the U.S. stepped up sanctions enforcement, have started to make their way to China, beginning to clear a backlog of more than 10 million barrels of the grade sitting on tankers at sea. 

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China has increased purchases of Sokol in recent weeks and its independent refiners are expected to take several such shipments this month, traders told Bloomberg earlier this week. Tankers loaded with Sokol and idling offshore Singapore since December have started moving towards China’s shores, Bloomberg notes.  

By Tsvetana Paraskova for Oilprice.com

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