Traders and crude market analysts are baffled by a ship-to-ship (STS) transfer of a Rosneft crude cargo offshore India without any attempt to conceal the origin of the oil, as the U.S. sanctions on Russia’s top oil producers and exporters have upended India’s crude purchases in recent weeks.
Earlier this week the Fortis tanker, sanctioned by the UK and the EU, took about 720,000 barrels of Russia’s Urals crude from another sanctioned vessel, the Ailana, off the coast of Mumbai, according to tanker-tracking data compiled by Bloomberg, Vortexa, and Kpler.
The Ailana, for its part, had departed with the crude from Russia’s export port Ust-Luga on the Baltic Sea in a loading that had taken place before the U.S. announced sanction on Rosneft and Lukoil, according to the ship-tracking data.
Since the sanctions were announced on October 22, the Ailana has idled off the Indian coast.
Now apparently it has offloaded its cargo onto another vessel that’s still bound for India, for the Kochi port in the south, while the Ailana is currently observed to be travelling back to Russia.
The unusual STS transfer is not that it has happened, but that it has happened from one sanctioned tanker to another, suggesting there hasn’t been any attempt at concealing that the cargo is of Rosneft origin.
The STS transfers and other tactics in Asian waters are bound to thrive even more in the coming weeks as Russia’s top crude buyers, China and India, are scrambling to ensure supply without incurring the wrath of the Trump Administration.
Indian refiners are pivoting away from Russian crude and are buying additional barrels from the Middle East and the Americas to offset what is expected to be a steep decline in Russian loadings in December and January.
China’s state refiners have reportedly suspended purchases of Russian oil, but the independent refiners in China, the so-called teapots, are unlikely to halt imports of the cheap crude that has become a staple for their refineries.
By Charles Kennedy for Oilprice.com
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