Investing.com -- The price for shipping Russian ESPO crude oil to China has more than tripled following the recent US sanctions on Moscow’s oil industry, Bloomberg reported. Traders expect these rates to rise even further.
The cost to transport ESPO oil from Kozmino port, located on Russia’s east coast, to China surged to between $5 million and $5.5 million on Monday. This is a significant increase from the $1.5 million it cost prior to the sanctions, according to traders familiar with the route who wished to remain anonymous due to the sensitivity of the matter.
Last week, the US expanded its sanctions on oil tankers and targeted two Russian firms that manage over a quarter of the OPEC+ producer’s seaborne exports. These companies, along with insurers and traders, were added to the blacklist. The vessels under sanction were responsible for transporting around 22% of the crude oil shipped by sea in 2024, as per the International Energy Agency.
The sanctions have had an instant effect, with tankers carrying ESPO and another Russian grade, Sokol, now idling off the Chinese coast. This information is based on ship-tracking data. ESPO has been popular among China’s refiners due to its short shipping distance.
Most of the tankers that make the journey between Kozmino and China are Aframaxes, which can carry up to 750,000 barrels.
Before the latest round of US sanctions, ports in Shandong province already had reservations about dealing with sanctioned tankers. This hesitation followed a warning from a major terminal operator. Shandong province is where most of China’s independent refiners are located.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.