Russia Oil Trade to China, India Stalls as Sanctions Drive Up Shipping Costs

By Siyi Liu, Chen Aizhu and Nidhi Verma

SINGAPORE, Jan 28 (Reuters) – Trade for March-loading Russian oil in top buyer Asia has stalled as a wide price gap between buyers and sellers emerged in China after costs for chartering tankers unaffected by U.S. sanctions jumped, according to traders and shipping data.

Washington imposed fresh sanctions on Jan. 10 targeting Russia’s oil supply chain, causing tanker freight rates to soar as some buyers and ports in China and India steered clear of sanctioned ships.

Offers for March Russian ESPO Blend crude exported from the Pacific port of Kozmino jumped to premiums of $3-$5 a barrel to ICE Brent on a delivered ex-ship basis (DES) to China after freight rates for an Aframax tanker on the route surged by several million dollars, three traders familiar with the grade said.

Prior to the January sanctions, robust winter demand and firming prices for rival grades from Iran sent spot premiums for ESPO Blend crude to China rising to close to $2 a barrel, the highest since the start of the Ukraine war in 2022, the aftermath of which had sent discounts to a…