Shipping chaos deepens as US sanctions push Russian oil into maritime limbo

New US sanctions that took effect on November 21 could leave almost 48 million barrels of Russian crude stranded at sea, forcing dozens of tankers to search for alternative destinations and triggering another major reshuffle in global oil flows.

Washington’s latest measures — introduced last month and targeting top Russian producers Rosneft PJSC and Lukoil PJSC — mark one of the Trump administration’s most forceful steps yet to increase pressure on the Kremlin over the war in Ukraine. The US Treasury said earlier this week that the sanctions were already proving effective, pointing to weakened demand and growing discounts for key Russian crude grades, Bloomberg reports.

With the restrictions now operational, Indian refiners have begun securing alternative supplies, rapidly booking Middle Eastern cargoes at a pace that has pushed freight rates for the route to near five-year highs. Traders are meanwhile closely watching to see whether any buyers will take delivery of Rosneft and Lukoil cargoes 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 at 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.”

Data from analytics firm Kpler indicate that close to 48 million barrels of Rosneft and Lukoil crude — largely Urals and ESPO grades — are currently in transit or preparing to load. Some 50 tankers are headed toward China and India, while others lack declared destinations or are diverting to smaller ports as intermediaries distance themselves from the trade.

Russia has prioritized keeping shipments moving, maintaining seaborne flows at around 3.4 million barrels per day, according to Bloomberg-compiled tracking data. But even China and India — Russia’s main buyers since 2022 — are showing caution amid the threat of secondary sanctions. Their final stance, analysts say, will determine how much oil ultimately reaches refiners.

“It’s painful, but it’s painful only for three or four months,” said Adam Lanning, senior tanker market analyst at shipbroker SSY, predicting that markets will eventually “find workarounds to import that crude without coming under scrutiny.”

Early disruptions are already apparent. Several tankers have reversed course or are diverting to ship-to-ship transfer zones near Singapore, Malaysia, and South Korea as the global oil market enters yet another period of sanctions-driven upheaval.

By Vafa Guliyeva