Russian crude heads to Asia on Chinese ships - Reuters
At least four or Chinese VLCCs are carrying Russian crude oil for delivery in China and one is heading for India, according to Reuters.
PHOTO: Liberia-flagged Aframax tanker Suvorovsky Prospect discharges fuel oil from Russia at the Matanzas terminal, in Matanzas, Cuba. Reuters
The cargoes were scheduled between 22 December and 23 January.
Russia is using Chinese vessels to transport crude to Asian countries after the G7 price cap on Russian oil came into effect from 5 December. Members of the G7 and EU, and Australia, agreed to cap purchases of seaborne Russian crude oil at $60/bbl.
It is still possible for countries not backing the price cap to buy Russian crude above $60/bbl. But there are fewer options to ship +$60/bbl Russian crude now with most Western countries backing the ban handling of cargo above that cap.
However, as the price cap is now higher than the current price or Russian Urals crude oil, Asian countries like China and India are benefitting from purchasing the Russian oil at large discounts. Indian refiners are buying Russian oil at a discount of $15-20/bbl to Brent, according to Reuters.
After the US, the EU and other Western countries imposed heavy sanctions on Russian oil to limit its funding for the war in Ukraine, Russia has turned to Asia for exports with the help of Chinese ships.
About 18 Chinese VLCCs and another 16 Aframax-sized vessels could be used for transporting Russian oil in 2023, Reuters reckons.
By Debarati Bhattacharjee
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