Washington’s move last month to blacklist top oil producers Rosneft PJSC and Lukoil PJSC is arguably its most aggressive to date under the current administration, as President Donald Trump tries to dial up pressure on the Kremlin over the war in Ukraine. | Photo Credit: Dado Ruvic
Washington’s move last month to blacklist top oil producers Rosneft PJSC and Lukoil PJSC is arguably its most aggressive to date under the current administration, as President Donald Trump tries to dial up pressure on the Kremlin over the war in Ukraine. The US Treasury said earlier this week that the measures were already a success, given lower demand and discounts on key Russian oil grades.
With the restrictions now only hours away, Asian buyers are in a race against time. Indian refiners are rushing to find replacement supplies, booking oil tankers for cargoes from the Middle East at a pace that has already pushed freight rates for the route to near a five-year high. Traders, meanwhile, are closely monitoring the ultimate buyers — if any — for Lukoil and Rosneft crude already at sea.
“Russian export flows are holding up, but it’s not finding its way through to their destinations yet,” said Warren Patterson, head of commodities strategy for ING Groep NV. “If that continues and finally backs up all the way, we could start seeing supply falling, which will be a concern to markets.”
Figures from analytics firm Kpler suggest that close to 48 million barrels of Rosneft and Lukoil crude — mostly Urals and ESPO grades — are currently in transit or beginning to load. That includes roughly 50 tankers pointing toward China and India, but also others without destination or aiming for smaller ports, scattered from the Baltic to the South China Sea as intermediaries distance themselves from the trade.
With Russia eager to keep oil flowing, Moscow has made loading a priority — it has kept seaborne shipments sizable, at around 3.4 million barrels a day, according to vessel-tracking data compiled by Bloomberg. Benchmark prices have also so far largely shrugged off the impact of the latest curbs.
Still, not all of these barrels will necessarily find a home — even in Asia’s largest markets. China and India have taken the lion’s share of Russia’s exports since the invasion of Ukraine in 2022, and they continue to have close ties with Moscow.
Both countries, however, are also wary of getting tangled in looming secondary sanctions, as the US raises the heat on any player facilitating Russian exports. The extent of those restrictions, and Washington’s willingness to enforce them, will determine just how much oil makes its way to refiners.
“It’s painful, but it’s painful only for three or four months,” said Adam Lanning, senior tanker market analyst at shipbroker SSY. “What we’ll likely see happening in the months ahead is, as we’ve seen, the markets start to adjust and will find workarounds to import that crude without coming under scrutiny.”
Rising pressure on Russian exports has already prompted buyers to shift to mainstream grades. The coming days will test that resolve, however.
Two vessels laden with Urals that had U-turned on their journeys — likely as a result of sanctions — have restarted those voyages in recent days, signaling they’re headed for India. It’s unlikely they can reach their ultimate buyers before the end of the wind-down period on November 21.
The Spirit 2, laden with 730,000 barrels of Urals from Rosneft, was traveling toward Asia when it U-turned after passing the Suez Canal in early November and idled in the area, ship-tracking data show. Over the weekend, it began sailing south again, signaling India as its destination.
The Furia, another Aframax that made a dramatic U-turn in the Baltic Sea in late October, has just passed the Suez Canal this week and is heading to India. It is transporting nearly 730,000 barrels of Urals taken from Rosneft, data show.
Others, though, are already providing early indications of the disruption that Western sanctions can bring.
In Russia’s Far East, the Cindy had loaded up nearly 770,000 barrels of ESPO from Kozmino in early November without a clear destination, according to ship-tracking data. It is now headed to the open waters off Singapore and Malaysia, where Iranian, and at times Russian, oil is often transferred between tankers to mask its origin.
The Fortis, with 720,000 barrels of Urals from Rosneft, is sailing toward South Korea’s Yeosu — another area popular for ship-to-ship transfers — after conducting a rare transfer in waters off India. Fortis had been expected to land in Ningbo, China, before changing its destination to Yeosu.
More stories like this are available on bloomberg.com
Published on November 21, 2025
