After being hit by western sanctions, Russia is boosting its shipments of oil produced in the Arctic region to India and China at steeper discounts, trade data shows.
Arctic crude exports to India hit a record of 6.67 million barrels in November with a further 4.1 million in December, Refinitiv data showed.
Arctic grades Arco, Arco/Novy Port and Varandey do not normally head East but are now finding new homes further afield after the West introduced a price cap on Russian oil in December.
“All these Arctic crudes usually go to the EU but now they have to go elsewhere,” a Singapore-based trader said.
“Now India and China are their major homes,” he said.
Shipments Change Course
Last week, India imported its first Varandey crude cargo that loaded in Murmansk port in late November, according to two sources and Refinitiv data.
The 900,000-barrel cargo onboard tanker Bear Alcor that sailed via Europe, the Mediterranean and the Suez Canal, was discharged at Cochin port in Kerala in southern India on December 27 for refiner Bharat Petroleum Corp.
The other two 600,000-barrel cargoes that loaded in November were discharged at Rotterdam in the Netherlands.
Russia has reasonably good volumes of other grades as well, which are being offered to Indian buyers, one of the sources at an Indian refiner said.
Varandey crude is easy for Indian refiners to process although future purchases would depend on price levels, the second source said.
At least three oil tankers that loaded Arctic crude in Murmansk port are now heading to China, Refinitiv data showed.
One of the tankers, Nikolay Zuyev, carrying about 780,000 barrels of crude, is expected to arrive on January 18 but it still does not have a specific destination.
Another two tankers – NS Bravo and Gladiator, carrying about 900,000 barrels of crude each – are expected to arrive at the Chinese eastern city of Qingdao on February 3 and 15, respectively, the data showed.
- Reuters, with additional editing from Alfie Habershon