New US sanctions target 183 vessels, impacting 42% of Russia’s seaborne oil exports

On 10 January, the US Department of the Treasury revealed sanctions on 183 vessels, including 143 tankers, as well as opaque traders of Russian oil, Russia-based oilfield service providers, and senior Russian energy officials. Among those sanctioned are two of Russia’s largest oil producers and exporters, Gazprom Neft and Surgutneftegas. The UK has followed suit, imposing sanctions on both companies. These energy companies produce more than 1M barrels per day of oil.

In addition, the US Office of Foreign Assets Control (OFAC) sanctioned two Russia-based maritime insurance providers, Ingosstrakh Insurance Co and Alfastrakhovanie Group, both of which were previously blacklisted by the UK.

“The United States is taking sweeping action against Russia’s key source of revenue for funding its brutal and illegal war against Ukraine,” stated Secretary of the Treasury Janet L Yellen.

This significant move follows the recent decision by the Nordic-Baltic 8++ countries to enforce insurance verification requirements for ’shadow’ tankers transiting their waters.

Big tankers involved

The US Department of the Treasury emphasised the newly announced sanctions package targets "an unprecedented number of oil-carrying vessels, many of which are part of the shadow fleet."

Breakwave Advisors reported on X that 105 of the newly sanctioned tankers have a carrying capacity of more than 100,000 dwt. The list includes 76 Aframaxes, 22 Suezmaxes, five VLCCs and two FSOs, according to the same source.

Kpler estimates 117 of the targeted vessels are crude oil tankers, with 102 transporting Russian crude to China and/or India at least once in 2024, and 11 exclusively carrying Arctic crude from oil fields to export terminals within Russia.

According to Kpler, the newly added vessels have an average age of 16.8 years, with the majority falling within the 16-20-year age range. Surprisingly, some newer vessels (0-5 years) also made the list, highlighting compliance challenges affect vessels across all age categories.

Export disruptions

“These tankers transported more than 530,000 barrels of Russian crude exports last year, accounting for about 42% of Russia’s total seaborne crude exports. More than half of this volume was shipped to China, making up roughly 61% of China’s seaborne imports of Russian oil,” said Kpler senior freight analyst Matt Wright.

The remainder of the exports largely went to India, contributing to nearly a third of the South Asian nation’s total intake of Russian oil.

Mr Wright added, “The swift sanctions are expected to clamp down on Russian oil exports, pushing oil sellers to scramble for new vessels to bridge the shipping capacity gap – a challenge that is unlikely to be resolved anytime soon.”

Impact on the market

Kpler forecasts should China and India reduce their reliance on Russian crude exports, they will likely turn to the Middle East and West Africa for replacement cargoes. This will further increase demand for non-sanctioned vessels, leading to higher Aframax and Suezmax rates across load regions. In turn, this will push up VLCC rates, Mr Wright noted.

Shipbroking firm Ifchor Galbraiths also highlighted in a recent report that if the US continues targeting ’dark fleet’ vessels with OFAC sanctions, vessel supply could tighten further. Independent refiners are competing for a shrinking pool of vessels willing to carry sanctioned barrels, while many of these vessels have not yet been listed by OFAC, analysts pointed out.

Riviera recently reported Russia’s shadow fleet consists of approximately 1,700 older vessels, many over 20 years old, transporting sanctioned oil and gas. These vessels often operate under opaque ownership structures and may lack proper insurance or classification.