Russia’s Western Oil Exports Hold Steady Despite New U.S. and EU Sanctions

MOSCOW, Oct 29 (Reuters) – Newly imposed U.S. and EU sanctions targeting Russia and its oil giants Rosneft and Lukoil have yet to disrupt physical crude shipments from the country’s western ports, according to LSEG data and market sources.

Despite weather-related constraints and sanction pressure, October exports from western ports of Primorsk, Ust-Luga and Novorossiisk are seen at about 2.33 million barrels per day (bpd), in line with Russia’s revised monthly program, LSEG data shows and sources say.

Russia’s western oil exports are under pressure from new U.S. sanctions, sources say, as Urals oil loaded from the ports is purchased by India and Turkey which are expected to comply with the new restrictions imposed by the West.

The U.S. set a November 21 deadline to wind down all dealings with Rosneft and Lukoil. Given the roughly four-week voyage from Baltic ports to Indian refineries, shipments loaded now may arrive to buyers after the cutoff date, raising logistical and financial risks.

“Everything that is loaded in Primorsk now, will arrive in India after November 21,” one of the sources said. He added that there may be issues with banks over payments for the barrels, noting that Russian oil sellers don’t want to be paid in rupees.

Indian refiners have yet to decide what to do about their Russian oil purchases. India’s Reliance Industries, a major Rosneft customer, said it is assessing the impact of the sanctions on its crude supply contracts.

The sources expect Russian oil sales to be handed over to intermediaries and trading firms, which will increase costs for sellers but may shield buyers from sanctions-related risks.

(Reporting by Reuters;Editing by Elaine Hardcastle)

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 107,166 members