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29 February
Russia tries to clear Sokol oil glut with fresh China sales

This content was partly produced in Russia where the law restricts coverage of Russian military operations in Ukraine.

Adds no comment from China customs office in paragraph 13

SINGAPORE/MOSCOW, Feb 28 (Reuters) - Six tankers with Russian oil in ships sanctioned by the United States were sailing to Chinese ports this week, but it wasn't clear if they would be allowed to discharge, according to LSEG, Kpler, Vortexa shipping data and two industry sources.

Were China to buy oil in the tankers it would help alleviate one of the worst gluts of Russian oil in the last two years caused by payment issues amid Western sanctions imposed on Russia due to its military actions in Ukraine.

If China rejects the tankers it would further worsen problems for Moscow, which has been struggling with Sokol oil sales and payments in recent weeks as Washington ramped up sanctions pressure.

More than 10 million barrels of Sokol oil supplied by Sakhalin-1, a subsidiary of an oil giant Rosneft ROSN.MM, have been floating in a dozen tankers over the past three months without a buyer.

On Wednesday the Russian-flagged tanker NS Century operated by Sovcomflot's (SCF) FLOT.MM Dubai-based subsidiary SCF MGMT anchored at close proximity to China's Qingdao port, according to LSEG data and analytical firms Vortexa and Kpler.

NS Century, sanctioned by the United States for price cap evasion, carries 698,000 barrels of Sokol oil. It was not clear why the tanker didn't head straight to the port, but anchored outside. The port of Qingdao representative didn't respond to a Reuters request for comment.

"Chinese ports may be more concerned with subsequent payment issues than allowing these ships to offload, as that could mean oil stuck at ports," an industry source said.

Krymsk, Liteyny Prospect, Nellis, NS Antarctic and Sakhalin Island, all sanctioned by the U.S. due to a price cap evasion, are heading to China's ports and are set to offload early in March, according to LSEG and Kpler data. Overall volume of Sokol oil onboard of these tankers is some 4.1 million barrels.

Gabon-flagged Krymsk and Liberia-flagged Nellis are heading to Dongjiakou port, while Panama-flagged Sakhalin Island - to Tianjing and Gabon-flagged Liteyny Prospect - to Qingdao, according to Kpler data.

All tankers, but Nellis, are operated by SCF group of companies. Nellis is operated by HS Nellis LTD.

Rosneft didn't answer Reuters requests for comment. Russia's SCF declined to comment.

China's General Administration of Customs did not immediately respond to a request for comment.

The NS Lion tanker with some 611,000 barrels of Sokol that was going towards Dongjiakou port had turned away on Monday and was going towards Singapore, according to LSEG and Vortexa data.

The tanker was added to the most recent sanction list the U.S. Treasury announced last Friday.

(Reporting by Reuters reporters in Moscow, Aizhu Chen and Florence Tan in Singapore; Editing by Keith Weir and Tom Hogue)

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