(Bloomberg) -- The latest US sanctions on Russia’s oil trade have brought a swath of tankers that deliver Moscow’s crude to a halt — reinforcing the significance of the measures in any negotiations over ending the war in Ukraine.
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About 60% — 94 out 154 — of the active tankers blacklisted by the outgoing Biden administration last month for their involvement in the Russian oil trade have stopped hauling barrels for Moscow or anyone else, ship-tracking data compiled by Bloomberg show. Another seven were under construction or undergoing sea trials.
On Wednesday, US President Donald Trump said he’d spoken to Vladimir Putin about ending the war in Ukraine. The discussions touched on energy but, according to Kremlin spokesman Dmitry Peskov, not sanctions.
However, the Jan. 10 measures are forcing Russia to rewire its oil supply chain to find alternative ships — and pay high freight costs for them. It’s also delivering cargoes in unusual ways. At stake is the country’s capacity to keep supplying increasingly cautious customers and, ultimately, Russia’s own production of hydrocarbons.
While there’s no sign yet that output is being hurt by the measures, Russia’s tanker fleet clearly is being disrupted. Around half of the idled vessels observed by Bloomberg became inactive as soon as they were blacklisted.
To be clear, it’s too soon to say what will happen to the remaining tankers that were sanctioned on Jan. 10 and are still operating for now. If history is any guide some will also be forced to stop trading.
Of 44 that have taken on cargoes since being blacklisted, 20 are operating solely within Russia. Another nine are specialized shuttle ships used by two projects on Sakhalin Island in Russia’s Far East, most of which are struggling to offload their consignments.
However, some buyers and buyer countries have balked at dealing with sanctioned shipments in the wake of the US Treasury’s measures.
The Indian government has said it won’t allow sanctioned ships to dock at its ports after Feb. 27 and before then only if they are carrying cargoes loaded prior to Jan. 10. Many ports in China’s Shandong province, a hub for independent refiners, are wary of handling sanctioned tankers after a warning from a major terminal operator. Likewise, the biggest refiner in Turkey, Russia’s other major customer, is also restricting purchases to avoid falling foul of US sanctions.