Cost to Ship Russian ESPO Oil to China Triples After Sanctions

(Bloomberg) —

The cost of shipping Russian ESPO crude to China has more than tripled after the US imposed aggressive sanctions on Moscow’s oil industry last week, with rates expected to climb even higher, according to traders.

Freight rates to transport ESPO oil from Kozmino port on Russia’s east coast to China jumped to between $5 million and $5.5 million on Monday, compared with $1.5 million prior to the sanctions, said traders familiar with route, who asked not to be identified because the matter is sensitive.

The US broadened its sanctions on tankers, targeted two Russian companies that handle more than a quarter of the OPEC+ producer’s seaborne exports, as well as insurers and traders. The blacklisted vessel fleet moved around 22% of crude shipped by sea in 2024, according to the International Energy Agency.

There’s been an immediate impact from the sanctions, with vessels carrying cargoes of ESPO and another Russian grade — Sokol — idling off the Chinese coast, according to ship-tracking data. ESPO has been a favorite of China’s refiners due to its short shipping distance.

The majority of tankers that travel the route between Kozmino and China are Aframaxes, which have the capacity to carry 750,000 barrels.

Even prior to the latest US penalties, ports in Shandong province were wary of handling sanctioned tankers following a warning from a major terminal operator. Shandong is home to most of China’s independent refiners.

© 2025 Bloomberg L.P.

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