China, India seek new supplies as US sanctions tighten grip on Russian oil

Nidhi Verma - Reuters - 13/01
Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to severe new U.S. sanctions on Russian producers and tankers that are designed to curb the revenues of the world's second-largest oil exporter.
  • Chinese, Indian refiners buying more crude from Mideast, Africa
  • Russia to face higher costs on seaborne exports
  • Russia likely to increase discount on oil
  • India expects to receive Russian oil for next two months
SINGAPORE/NEW DELHI/MOSCOW, Jan 13 (Reuters) - Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to severe new U.S. sanctions on Russian producers and tankers that are designed to curb the revenues of the world's second-largest oil exporter.
U.S. President Joe Biden's administration imposed its broadest package of sanctions so far targeting Russia's oil and gas revenues on Friday to give Kyiv and Donald Trump's incoming team leverage to reach a deal for peace in Ukraine.
The incoming Trump administration has not yet responded to requests for comment.
The U.S. Treasury imposed sanctions on Russian oil producers Gazprom Neft (SIBN.MM), opens new tab and Surgutneftegaz, as well as on 183 vessels that form part of a shadow fleet that has so far allowed Russia to skirt sanctions to get its oil to global markets.
According to Morgan Stanley, which cited data from tanker tracker Vortexa, the tankers subject to the latest sanctions carried around 1.5 million barrels of crude oil per day in 2024. That equates to around 1.4% of global oil demand.
Many of them have been used to ship oil to India and China as Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. In addition, some tankers have shipped oil from Iran, which is also under sanctions.
Oil prices have jumped. Global benchmark Brent crude rose on Monday above $81 a barrel to its highest since August and the premium of prompt crude to that for delivery six months later has risen to its highest since April, implying traders expect supplies to remain tight.
The Kremlin said the sanctions risked destabilising global markets, and Moscow would seek to counter them.
"It is clear that the United States will continue to try to undermine the positions of our companies in non-competitive ways, but we expect that we will be able to counteract this," Kremlin spokesman Dmitry Peskov said on Monday.
Washington also imposed sanctions on top Russian ship insurer Ingosstrakh and another insurance provider Alphastrakhovanie.
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