More than a dozen tankers loaded with 10 million barrels of Russian Sokol-grade crude have been stranded off the coast of South Korea for weeks. This is not the first time that something similar has happened with Russian crude oil, for which difficulties in finding buyers are increasing. However, this time the news is of huge amount of crude oil stored in the sea without destination, without trade or profit. Western sanctions on Russian crude and problems with maritime transportation are creating an unusual situation.
Everything indicates that this oil is not finding a market due to the intensity of American and Western sanctions on Russian crude. The oil market is undergoing a real revolution (shipping flows) due to sanctions and attacks by the Houthi rebels in the Red Sea.
Crude oil routes are being rerouted, and oil that once flowed from Asia to Europe is no longer flowing. This Asian crude oil (from Saudi Arabia, Iran, UAE, etc.) now resides on the said continent, Direct competition with Russian crudeWhich is finding fewer and fewer buyers willing to oppose the Western powers.
As Reuters agency reported, this untargeted oil has not been sold for several weeks due to United States sanctions and payment problems, according to two traders and ship tracking data consulted by the news agency.
The quantities, which equate to 1.3 million metric tons, represent more than a month’s production Sakhalin-1 ProjectWhat was for years one of the most important Russian oil projects has suffered greatly since returning to production following the sudden departure of US company Exxon Mobil, which left Russia after Vladimir Putin’s invasion of Ukraine.
Russian oil has problems
Difficulties selling Sokol crude are one of the most significant challenges Moscow has faced in recent months. Although sanctions come from far and wide, the most serious blockages have been occurring in recent months, as the US has stepped up controls on companies and refineries that continue to negotiate with Moscow.
Washington has said it wants tougher and more effective sanctions Reduce President Vladimir Putin’s Income and its war machine in Ukraine, but to prevent the collapse of Russian energy flows into global markets, the US and its allies prefer to move slowly, giving the market time to readjust to the decline of Russian oil. . Last year, the United States imposed sanctions on several ships and companies involved in the transportation of Sokol.
By January 24, 14 Sokol ships were stranded in the South Korean port of Yeosu, including 11 Aframax ships (specialized tankers used by Russia to transport crude oil) and three large crude oil carriers (VLCCs), two of which Can carry luggage up to. According to data from LSEG and Kepler, million barrels. The quantity stored in these vessels represents 45 days’ total production Sakhalin-1 ProjectWhose daily pumping is currently 220,000 barrels per day (bpd).
They tell Reuters that Sokol shipments to the public company Indian Oil have been delayed in recent months due to payment problems and other issues that are difficult to explain (except ‘fear’ of US retaliation), which have forced the majority of refineries in India to operate. Have forced. To take advantage of its reserves and buy more oil from the Middle East.
Indian Oil is the only state-owned refiner that has an annual agreement to buy various Russian grades, including Sokol, from Russian oil major Rosneft.
Pay in rubles, rupees or dollars
A source close to the Indian company said the company does not expect a shipment of Sokol oil any time soon because of disagreements over which currency will be used to pay for it. This is a recurring dispute within BRICS. These emerging countries, seeking to usurp the ‘throne’ of the world economy from the US, have chosen which currency to use in their commercial payments (when they trade with each other) without reaching any kind of clear agreement. But there have been many debates.
Finally, in most cases the dollar is charged. The point is that while all these countries prefer a trade and payments model that is not dominated by the dollar, they also do not want a model in which the dominant currency is the yuan, ruble or rupee. There has also been speculation regarding the construction of a joint BRICS currencyHowever, this plan was immediately rejected by these countries due to the technical difficulty of implementing it and the renunciation of each country’s monetary sovereignty.