The Kremlin. Stock photo: Getty Images

Imports of Russian oil from the Far East and Iranian oil to China will resume in March as non-sanctioned tankers have joined transportation routes, replacing vessels that were subjected to the US embargo.

Source: Reuters, citing market sources and analysts, as reported by Economichna Pravda

Details: The resumption of sanctioned oil shipments to China alleviates concerns about supply shortages that previously contributed to rising global oil prices, experts note.

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Vortexa analyst Emma Li revealed that freight rates for tankers transporting ESPO oil from Kozmino port (Russia, Far East) to China have tripled. As a result, at least 17 vessels not under US sanctions joined this route between 11 January and 20 February.

Some of these vessels were previously used to transport sanctioned oil, particularly from the Baltic region, or were engaged in shipping petroleum products, Li notes.

LSEG data shows that 11 tankers not subject to US sanctions have recently joined shipments between Russia and China.

Traders estimate that freight rates from Russia’s Far East to northern China now stand at approximately US$4-4.5 million.

Li also says that ESPO oil loadings in February returned to the 2024 average of 920,000 barrels per day after falling to 860,000 barrels in January. Earlier projections had suggested that ESPO shipments to China in February would drop to 780,000 barrels per day.

Among the other factors increasing Russian oil exports is the reduction in processing at Russian refineries due to Ukrainian drone strikes, leaving more crude oil available for export.

Iranian oil imports to China rebounded to 1.4 million barrels per day between 1 and 20 February, after falling to a nearly two-year low of less than 800,000 barrels per day in January, according to Vortexa data.

The volume of Iranian oil directed to Shandong province exceeded 1.1 million barrels per day, surpassing the 2024 average, according to the data.

Kpler data indicates that Iran’s oil shipments to China in February rose to 771,000 barrels per day, compared to 692,000 barrels in January.

Background:


Russia increased oil exports by acquiring new tankers and began ship-to-ship transfers. However, deliveries to clients remain problematic, with loaded vessels forced to idle.
The latest US sanctions against Iran may push market participants to rely more on ship-to-ship transfers or extend tanker geolocation shutdowns to facilitate illicit trade in Iranian oil.

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