US, Nov 21 : Nearly 48 million barrels of Russian crude could be left stranded on the water as new US sanctions on Russian oil take effect on Friday, upending global crude flows and sending dozens of tankers searching for fresh destinations.
The sanctions, which blacklist major Russian oil producers Rosneft PJSC and Lukoil PJSC, mark Washington’s boldest move yet to pressure Moscow over the war in Ukraine. The US Treasury says the measures are already yielding results, citing weaker demand and steeper discounts on Russian grades.
Asian refiners in a race against time
With the deadline hours away, Asian buyers especially Indian refiners are scrambling for alternatives, triggering a rush for Middle Eastern cargoes. Freight rates on key routes have surged to near five year highs as tankers reposition to fill supply gaps.
Traders are closely tracking where Rosneft and Lukoil barrels currently at sea might ultimately land.
“Russian export flows are holding up, but not reaching their destinations yet,” said Warren Patterson of ING Groep. “If this continues, supply could start falling a major concern for markets.”
48 million barrels floating with uncertain destinies
Data from analytics firm Kpler shows nearly 48 million barrels of Rosneft and Lukoil crude mainly Urals and ESPO either in transit or loading, including around 50 vessels headed toward China and India.
Others lack clear destinations, drifting between the Baltic and the South China Sea as intermediaries pull back to avoid sanctions risk.
Despite this, Russia is prioritising shipments, keeping seaborne exports robust at around 3.4 million barrels per day, according to Bloomberg vessel-tracking data.
China and India cautious amid threat of secondary sanctions
China and India the biggest buyers of Russian oil since 2022 remain closely aligned with Moscow but are increasingly wary of falling afoul of US secondary sanctions.
Analysts say the severity of US enforcement will determine how much Russian crude ultimately reaches refineries.
“It’s painful, but only for a few months,” said Adam Lanning of SSY. “Markets will adjust and find workarounds, as they always do.”
Tankers turning, rerouting, and hiding origins
Recent vessel movements show the growing disruption:
Two Urals-laden tankers that performed dramatic U-turns due to sanctions concerns are again heading toward India but are unlikely to arrive before the wind down deadline.
The Spirit 2, carrying 730,000 barrels from Rosneft, reversed course near the Suez Canal before resuming its path toward India.
The Furia, another Aframax tanker with 730,000 barrels, U-turned in the Baltic and is now sailing past the Suez.
In the Far East, the Cindy left Kozmino with 770,000 barrels of ESPO but is now drifting off Singapore–Malaysia a hotspot for ship to ship transfers used to obscure origin.
The Fortis, with 720,000 barrels of Urals, diverted from China to South Korea’s Yeosu after transferring cargo off India.
Global oil flows brace for another reset
As the sanctions hit full force, global markets face yet another reshuffle of Russian crude supply routes. Whether Asian buyers continue absorbing discounted barrels or retreat under US pressure will determine how disruptive the next chapter becomes.