Bloomberg: around half of tankers tied to Russia and sanctioned by U.S. stop delivering oil

Two dozen of the 50 tankers, which have fallen under U.S. sanctions since October 2023, have stopped transporting Russian oil, Bloomberg writes.

The sanctions are the result of a price cap on Russian oil imposed by the G7 countries and the European Union in December 2022 — companies were forbidden from transporting and insuring Russian oil bought above $60 per barrel. It was assumed that the measure would limit Russia’s revenues from oil exports without creating a jump in energy prices on the world market. However, China and India, where Russia redirected about 90% of its exports after the restrictions were imposed, chose not to join the Western bloc’s measure.

According to Bloomberg’s report, only 18 tankers have “collected cargoes” since the restrictions were imposed. One more vessel was already carrying cargo at the time of the sanctions. The remaining tankers are currently idle. At the same time, Bloomberg notes, seven tankers were idle even before they were included in the sanctions list.

Over the past two months, 14 tankers carrying Sokol oil to India have yet to reach their destinations — almost half of them turned around. Of those, however, only three ships are sanctioned.

Acting Assistant Secretary of the U.S. Treasury for Economic Policy Eric Van Nostrand said, “Independent agencies, market analysts and the Russians themselves point to the fact that the price cap is achieving both of our goals: denying Russia the energy profits it needs to wage its illegal war, while simultaneously promoting stable energy markets.”

The impact of the restrictions on Russian oil trade is difficult to assess, including because of, as Bloomberg says, the “secretive nature” of the trade.

In December 2023, Bloomberg wrote that about half of Russia’s exports are accounted for by a “shadow fleet” consisting of old tankers that turn off their beacons so that they are not seen by tracking systems. Bloomberg also estimated that Russia spent $11 billion dollars in one year to circumvent the restrictions. Meanwhile, Russia received $11.3 billion from oil in October 2023 alone.