A record volume of Russian oil is on board tankers, with unprecedented amounts headed to India and China as other nations restrict imports due to the war in Ukraine.
Between 74 million and 79 million barrels from the OPEC+ producer were in transit and floating storage last week, more than double the 27 million barrels just before the Ukraine invasion in February, according to Kpler.
Asia overtook Europe as the biggest buyer for the first time last month, and that gap is set to widen in May, according to the data and analytics company.
The sharp rise in Russian oil in transit by sea highlights how the global energy trade has been hit by the invasion, with the US, UK and many EU companies turning their backs on their cargoes and forcing to Moscow to look for buyers in Asia.
China and India have bought millions of barrels from the country to take advantage of deep discounts in flows.
“Some of the interested buyers in Asia are motivated more by economics than taking a political stand,” said Jane Xie, senior oil analyst at Kpler in Singapore.
“That said, there has been an increase in US interest in buying Russian oil from India, so there may be some downside risks to this trade flow, even if it is currently unlikely to be affected. significantly”.
The combined flows of Russian oil to Asia’s two biggest buyers, India and China, hit records in April, mainly driven by increased purchases from India, according to Xie. Although this month’s shipments are likely to be slightly lower, they will only be surpassed by last month’s record, she said.
The volume of crude oil in the sea will expand from 45 million to 60 million barrels due to the increase in Russia’s seaborne trade with Asia if the European Union can agree to phase out all the nation’s imports by the end of this year, consultant of the FGE industry. he said in a note this week.
Vessels are forced to make longer voyages when carrying crude, such as the flagship Urals, from Russia’s western ports to Asia rather than Europe, with a one-way trip to China typically taking around two months.
As of May 26, about 57 million barrels of Urals and 7.3 million barrels of Russian Far East ESPO crude were noted to be in the water, compared to 19 million Urals and 5.7 million ESPOs at end of February, according to Kpler data.