Νew analysis from Vortexa focuses on Russian crude flows to China and India, assessing the impact on flows and freight from recent developments in US sanctions and India’s policy towards Russian tankers.
Russia’s maritime crude oil exports rebounded by approximately 50% from the previous week’s decline, despite mounting indications that sanctions are beginning to hinder Moscow’s oil distribution network.
Armen Azizian, Senior Oil Risk Analyst highlighted the key report takeaways.
Key report takeaways:
- Sanctions impact muted as Asia’s Russian crude imports rise; China’s record Sokol imports supported by 40% SCF utilisation
- Sokol floating storage plummets as barrels arrive in China; one Sokol-laden tanker in November remains in floating storage
- Almost half of China’s Sokol imports in March are from sanctioned tankers diverted from India; one tanker laden for six months
- Reliance stopping Russian crude imports on SCF fleet only impacts 5% of India’s total Russian crude imports
- Russian crude exports on SCF fleet to India decline 300kbd from 2023 average; exports on SCF fleet shift towards China
- Urals diversion spotted after Indian refiners’ voice shifting preferences, but plenty cargo still moving as usual
Conclusions
India’s likely SCF ban complicates imports from Russia, but sales are likely to continue with deeper discounts India’s import of Russian crude averaged slightly below 1.4mbd so far in Q1 2024, down by nearly 600kbd from the peak quarter in Q2 2023.
An alternative explanation for lower flows to India is the potential push for compliance with the price cap, while sellers are likely to seek for outlets that accept higher but still substantially discounted prices Overall, Russia continues to struggle to place all its barrels, but China’s willingness to take more Russian oil, as illustrated by the recent surge in imports, is clearly helping out.