Russia Faces An Impending Oil Tanker Crisis As Sanctions Pile Up

By Julian Lee

Feb 7, 2025 (Bloomberg) –On Jan. 10, the US Treasury sanctioned 161 oil tankers for their role in moving Russian oil. It was part of a raft of measures against Moscow imposed by the outgoing Biden administration that President Donald Trump has yet to dial down. Indeed, there appears to be a chance he’ll go even harder prior to any Ukraine peace talks.

The cost of finding a tanker to carry Russia’s flagship Urals oil to Asia has already jumped by almost 50% since the measures were introduced, according to data from Argus Media. The gap between prices when the barrels leave Russia and arrive in Asia, a proxy for delivery costs, have also soared.

While such surges happened in the past, there was reason at the time to be wary of how real they were. For example, inflating delivery costs would have been a clever way of making it look like exported cargoes cost $60-a-barrel or less — even if the sale price upon delivery to Asia was higher.

Doing that would have qualified the cargoes for access to western services including tankers and insurance while still allowing barrels to ultimately be sold far above a Group of Seven price cap.

There’s no way to prove that that kind of overstating of freight rates did or didn’t happen. There was simply a financial incentive to do it. Likewise, there’s no…