Supertanker freight rates have soared following expanded U.S. sanctions targeting Russia’s oil industry, as traders rush to secure vessels to ship crude from alternative sources to China and India.
The sanctions aim to restrict revenue from the world’s second-largest oil exporter due to its ongoing war in Ukraine.
Chinese and Indian refiners are now sourcing oil from regions like Europe, Africa, and the Middle East to compensate for reduced access to Russian supplies. Many affected tankers, part of a “shadow fleet” that has transported oil from Russia, Iran, and Venezuela, now face sanctions from the U.S., Britain, or the European Union.
Unipec, a major Chinese buyer, recently acquired several crude cargoes, including 2 million barrels of Norwegian Johan Sverdrup and smaller shipments from Senegal, Ghana, and Angola. Meanwhile, Chinese buyers PetroChina and Rongsheng also booked tankers to transport crude from the Middle East, where premiums for Dubai, Oman, and Murban benchmarks have risen to over $4 a barrel, the highest in more than a year.
Freight rates for shipping Russian ESPO blend crude from Kozmino to North China doubled to $3.5 million on Monday due to limited tonnage availability, according to S&P Global Commodity Insights. Additionally, several sanctioned tankers remain stranded outside China’s Shandong province, unable to discharge cargo after a local ban imposed before Washington’s announcement.
The latest sanctions and resulting market shifts highlight growing challenges for global oil trade and logistics, with increased costs and tightening supply chains shaping future developments.
