Russian Tanker delivers its Oil Cargo at Chinese Port

A tanker carrying Russian crude discharged at a port operated by Shandong Port Group in east China in the beginning of January 2025 after the Biden administration slapped fresh sanctions on Russian energy, Reuters has reported.

The tanker was the first to be hit by the sanctions, which include a grace period exempting cargoes loaded before Jan. 10 and unloaded before March 12, 2025.

Last week, Reuters reported that a purported U.S. Treasury document circulating among traders in Europe and Asia, revealed that some 180 vessels, several senior Russian oil executives, dozens of traders and two major oil companies are targeted by the sanctions.

Later, it emerged that the Biden administration has targeted Surgutneftgas and Gazprom Neft, two firms that handle 25% of Russian oil exports. The two companies shipped an average of 970,000 bbls a day in 2024.

India has announced that it will abide by the sanctions and turn away sanctioned tankers.

Previously, we reported that the sanctions would severely disrupt Russian oil exports to India and China–the biggest buyers of Russian crude–and could also give Trump more leverage in future negotiations as he tries to end the war in Ukraine.

Last year, India briefly overtook China as the largest buyer of Russian crude. However, India’s import of Russian oil in November plummeted 55% Y/Y to its lowest point since June 2022.

This could be the result of the country trying to diversify its oil supplies to avoid overlying on a single country.

Commodity experts at Standard Chartered predict that the ongoing strength in oil markets at the start of the new year is likely to persist, powered by, among other things, the removal of more Russian barrels from the market following the sanctions.

According to StanChart, the new restrictions roughly triple the number of directly sanctioned Russian crude oil tankers, enough to affect around 900 thousand barrels per day (kb/d).

Whereas it’s highly likely that Russia will try to circumvent the sanctions by employing even more shadow fleet tankers and ship-to-ship transfers, StanChart sees 500kb/d of displacements over the next six months.

Oil Price.com / ABC Flash Point News 2025.