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Newly Sanctioned Tankers Supplied Russian Oil to India

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November 17, 2023

By Florence Tan, Muyu Xu and Nidhi Verma

SINGAPORE/NEW DELHI, Nov 17 (Reuters) – Three oil tankers, newly sanctioned by Washington, regularly shipped Sokol crude from Russia’s Far East to Indian Oil Corp, the country’s top refiner, in recent months, according to shiptracking data from LSEG, Kpler and trade sources.

The U.S. on Thursday imposed sanctions on maritime companies and vessels for shipping Russian oil sold above the Group of Seven’s price cap, as Washington seeks to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine.

The Liberian-flagged ships hit with sanctions are the Kazan, Ligovsky Prospect and NS Century, according to the Treasury Department.

All three Aframax-sized tankers discharged Russian Sokol crude in India in September while two of them made the trip in October, the data showed.

In the short-term, sanctions may reduce the number of ships carrying Russian oil and prompt India to seek supplies elsewhere, but they are unlikely to stop the trade altogether due to its lucrative nature, several traders who declined to be named, said. 

As long as there are willing buyers, sellers and shippers will always find a way to make the oil flow, one trader said. 

One trader also said India may seek supply from the Mediterranean and North Sea to replace Russian Sokol.

NS Century is currently on its way to discharge Sokol crude at Vadinar port in Gujarat for Indian Oil Corp (IOC) on Nov. 25, LSEG and Kpler data showed.

IOC buys Sokol under an annual contract with Russian oil major Rosneft. A spike in global prices led to Russian oil being sold at above the price caps imposed by western nations of $60 a barrel.

The three vessels last year obtained safety certification from the Indian Register of Shipping (IRClass), according to its website. 

Ligovsky Prospect and Kazan, managed by Oil Tanker (SCF) Management-FZCO, were certified on Sept. 14, and May 7 last year, according to IRClass website. NS Century, managed by Dubai-based Sun Ship management (D) Ltd was certified on Sept. 15, 2022.

Societies such as London-headquartered Lloyd’s Register, the American Bureau of Shipping and IRClass provide services, such as seaworthiness checks and certification, which are vital for securing insurance and entry toports.

IOC and IRClass did not immediately respond to requests for comment.

Sokol crude is produced at the Sakhalin-1 project, managed by a Rosneft subsidiary after the exit of ExxonMobil.

Prior to sanctions and restructuring of the project’s ownership, India’s ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corp, and Sakhalin Oil and Gas Development Co (SODECO), a consortium of Japanese firms had a stake in the project.

(Reporting by Florence Tan and Muyu Xu in Singapore and Nidhi Verma in New Delhi; Editing by Jacqueline Wong, Raju Gopalakrishnan and Sharon Singleton)

(c) Copyright Thomson Reuters 2023.

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