Three tankers carrying Russia Sokol oil that have been stranded due to Western sanctions have started heading towards China, Reuters reported on Monday, citing tanker-tracking data from Kpler and LSEG.
While Kpler calculated that 10 million barrels of Sokol oil were stranded in a holding pattern off the coast of South Korea two weeks ago, as of Monday, Kpler puts the volume at 7.5 million barrels.
The stranded Sokol oil has been in a holding pattern in floating storage for three months as buyers cannot arrange payment in line with sanctions. According to Reuters, the three vessels that have now started heading towards China have been idling at sea since November, with two of the vessels carrying 2.2 million barrels, based on Kpler data, which was purchased above the $60 price cap imposed on Russian oil by the G7.
Reuters cited unnamed trading sources as saying that the cargoes had been purchased by private Chinese refiners.
The third tanker is reportedly carrying around 600,000 barrels of Sokol and is heading towards an Indian port.
The remaining 7.5 million barrels of stranded Sokol oil come from Russia’s Sakhalin-1 project, which produces an average of 220,000 bpd.
Over a year ago, the U.S. initiated sanctions and a price cap on seaborne Russian crude oil in an attempt to restrict revenues to the Kremlin and thus hinder the funding of its continued war against Ukraine.
The Kyiv School of Economics estimated in December that Moscow would bring in $178 billion from oil sales in 2023—and predicted that this figure would rise in 2024. According to the Centre for Research on Energy and Clean Air, the import ban and price cap have cost Russia $37 billion in export revenue. “The price cap has had an impact but has failed to live up to its potential” CREA analysts said last December.
By Charles Kennedy for Oilprice.com
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