Russia Set to Test New Delhi’s Nerve by Sending Sanctioned Oil and Tankers to India

(Bloomberg) —

Russia is sending cargoes of sanctioned oil to India on tankers that have been blacklisted by the US Treasury — setting up an acid test of Moscow’s ability to get around aggressive measures imposed by Washington earlier this month.

Three shipments of heavily sanctioned Arctic oil are all being carried to the South Asian country’s ports on tankers that were designated by the US Treasury on Jan. 10. In the Pacific, at least two cargoes from Sakhalin Island also appear to be on the way to India having spent time on US-listed vessels.

India has indicated that it would only allow sanctioned tankers that loaded before Jan. 10 into its ports — provided they get there before Feb. 27. All five shipments collected their consignments after Jan. 10.

At stake is Moscow’s ability to keep barrels flowing following the US measures, something that could ultimately dictate the country’s ability to maintain output levels. Failure to work around the sanctions would undermine expectations for a small surplus in the global oil market this year. 

So far, there’s no clear sign of a reduction in Russia’s flows since the measures were imposed by the Treasury’s Office of Foreign Assets Control. A four-week rolling average of shipments observed by Bloomberg showed that they were little changed in the past seven-day period through Jan. 26, albeit at relatively low levels by historical standards. 

Daily crude flows in the seven days to Jan. 26 rose by about 320,000 barrels, or 11%, from the previous week to 3.07 million. Less-volatile four-week average flows edged higher from the previous week’s revised number, to 2.96 million barrels a day. Nevertheless, crude shipments in the first four weeks of 2025 were about 290,000 barrels a day, or 9%, below the average for the whole of the previous year.

A slump in flows from the country’s Baltic ports was more than offset by an increase in shipments from Pacific and Arctic terminals. Exports from the smaller Baltic port of Ust-Luga remain depressed after an unexpected slump in late December, while shipments from the larger Primorsk terminal gave up the previous week’s increase.

Murmansk

Three sanctioned tankers left the Arctic port of Murmansk in the week ended Jan. 26 and are headed for the Suez Canal. Their eventual destinations are ports in India, according to shipping data seen by Bloomberg. They are likely to arrive in the second half of February. India has said that it would only accept deliveries on sanctioned vessels if they loaded before Jan. 10 and arrived before Feb. 27.

The ships’ cargoes were pumped by Gazprom Neft, which was also blacklisted, and carried to a sanctioned floating storage unit at the port on sanctioned shuttle tankers. 

On the other side of the world, several shipments of Russia’s Sokol crude also seem to be heading toward the south Asian nation, having been handled by sanctioned ships on their journey.

The Pavel Chernysh and Viktor Konetsky, both sanctioned, showed their destination as Sikka in India soon after loading. The Viktor Konetsky subsequently switched its cargo onto an unsanctioned vessel off the Russian port of Nakhodka. That ship has yet to signal a destination, or to move far from the port. The Pavel Chernysh has been idling off Yeosu in South Korea, a popular ship-to-ship transfer site for Russian crude, for a week.

The voyage to India from both Russia’s Arctic and Pacific ports takes about a month. That gives time for the sanctions situation to be clarified, with processors in the south Asian nation hopeful that the new US administration may soften the impact of the curbs announced in the final days of the Biden presidency.

The new administration hasn’t clarified how it will view oil that was transferred from a designated ship onto an undesignated one.

Moscow has been rushing to find unsanctioned vessels to move the key Asian grade ESPO from the port of Kozmino, near Japan. Only one of the 19 vessels loading ESPO crude between Jan. 10 and Jan. 26 has been sanctioned by the US. The Li Bai took on a cargo between Jan. 17 and 18. It has yet to leave Kozmino. Three of the tankers loading at the port of Kozmino since the Jan. 10 measures came directly from shipyards around Zhoushan in China. Another went to the port after delivering a cargo of Russian Urals crude to China.

Most of the sanctioned tankers hauling Russia’s Pacific grades are idling near the coast, or near South Korea; none seems to be in a rush to reach its destination.

Separately, crude flows to Turkey surged to their highest since Moscow’s 2022 invasion of Ukraine immediately after the Jan. 10 sanctions announcement. At 730,000 barrels a day, shipments in the week to Jan. 19 beat their previous high by 16%. Those deliveries helped Russia to maintain its rate of exports.

Crude Shipments

A total of 28 tankers loaded 21.48 million barrels of Russian crude in the week to Jan. 26, vessel-tracking data and port-agent reports show. The volume was up from 19.26 million barrels on 26 ships the previous week.

Export Value

A decline in the price of Russian crude partly offset the increase in exports to leave the gross value of Moscow’s exports up by about $50 million to $1.43 billion in the week to Jan. 26.

Export values at Baltic ports were down week-on-week by about $4.50 a barrel, while those for Black Sea loading dropped by about $4 a barrel. The price for key Pacific grade ESPO slumped by about $8 compared with the previous week. Delivered prices in India were down by about $2.90, all according to numbers from Argus Media.

Four-week average income rose to about $1.42 billion a week, from $1.39 billion in the period to Jan. 19.

On this basis, the prices of Russia’s shipments from the Baltic and the Black Sea in the four weeks to Jan. 26 were up by about $1.30 a barrel from the period to Jan. 19. Prices for key Pacific grade ESPO were higher by about $1.70 a barrel.

Flows by Destination

• Asia

Observed shipments to Russia’s Asian customers, including those showing no final destination, were virtually unchanged at 2.57 million barrels a day in the four weeks to Jan. 26. That’s about 20% below the average level seen during the most recent peak in April.

About 920,000 barrels a day of crude were loaded onto tankers heading to China. The Asian nation’s seaborne imports are boosted by about 800,000 barrels a day of crude delivered from Russia by pipeline, either directly, or via Kazakhstan. 

Flows on ships signaling destinations in India averaged 1.36 million barrels a day, down from a revised 1.49 million for the period to Jan. 19.

The Indian figures, in particular, are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations. Most of those heading from Russia’s western ports through the Suez Canal end up in the south Asian nation.

Several tankers leaving Russia’s Pacific ports have yet to show final destinations. Historically, most have ended up delivering to China.

The equivalent of about 300,000 barrels a day was on vessels signaling Port Said or Suez in Egypt, or on those tankers leaving the Pacific ports. Those show up as “Unknown Asia” until a final destination becomes apparent.

• Europe and Turkey

Russia’s seaborne crude exports to European countries have ceased, with flows to Bulgaria halted at the end of 2023. Moscow also lost about 500,000 barrels a day of pipeline exports to Poland and Germany at the start of 2023, when those countries stopped purchases.

Turkey is now the only short-haul market for shipments from Russia’s western ports, with flows in the 28 days to Jan. 26 showing their fourth straight increase to hit 390,000 barrels a day. The increase was driven by a surge in tankers heading to Turkey in the week following the latest US sanctions. At 730,000 barrels a day, flows to Turkey in the seven days to Jan. 19 were the highest since Russia’s 2022 invasion of Ukraine, exceeding the previous high by 100,000 barrels a day.

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