Cost of Russian crude exports to China triples after US sanctions By Investing.com
Investing.com — The price of Russian ESPO exports to China has more than tripled following recent US sanctions on Moscow’s oil industry, Bloomberg reports. Traders expect these rates to rise further.
The cost of transporting ESPO oil from the port of Kozmino, on Russia’s east coast, to China rose to between $5 million and $5.5 million on Monday. This is a significant increase from the $1.5 million it was worth before the sanctions, according to traders familiar with the route who wished to remain anonymous due to the sensitivity of the matter.
Last week, the US increased sanctions on oil tankers and targeted two Russian firms that handle a quarter of the OPEC+ producer’s seaborne exports. These companies, along with insurance brokers, have been added to the blacklist. The vessels under penalty were responsible for transporting about 22% of the crude oil that was sent by sea by 2024, according to the International Energy Agency.
The sanctions had an immediate effect, as tanks carrying the ESPO and another Russian range, the Sokol, are now sailing off the coast of China. This information is based on ship tracking data. ESPO was popular among Chinese refiners because of its short shipping distance.
Most of the tankers that make the trip between Kozmino and China are Aframax, which can carry up to 750,000 barrels.
Before the latest round of US sanctions, ports in Shandong province were already skeptical about dealing with sanctioned tankers. This doubt follows a warning from a major terminal operator. Shandong province is where most of China’s private refineries are located.
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