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Tags: russian oil | traders | evade | sanctions | indian refineries

Russian Oil Traders Find Ways to Evade Sanctions

a tanker anchored at an oil export terminal
A tanker seen anchored at the oil export terminal in the far eastern port of Kozmino on Dec. 28, 2009 (AP)

By    |   Wednesday, 01 June 2022 08:09 AM EDT

Shippers and refiners of Russian oil are evading sanctions and getting the product to market by obscuring its origins, The Wall Street Journal reported Wednesday.

Fuels believed to have been partially made from Russian crude landed in New York and New Jersey last month, WSJ reported.

Shipping records, Refinitiv data, and analysis by Helsinki-based think tank Centre for Research on Energy and Clean Air showed that shipments were brought through the Suez Canal and across the Atlantic from Indian refineries, which have been big buyers of Russian oil.

"What likely happened was [Indian energy giant] Reliance took on a discounted cargo of Russian crude, refined it and then sold the product on the short-term market where it found a U.S. buyer," Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, told WSJ.

"It does look like there's a trade where Russian crude is refined in India and then some of it is sold to the U.S."

In early March, President Joe Biden signed an executive order banning the import of Russian oil, liquefied natural gas, and coal to the U.S. However, fuels often are made from blends of different products such as diesel.

On Monday, European Union leaders agreed to cut around 90% of all Russian oil imports over the next six months in the most significant effort yet to punish Russia for its unprovoked attack on Ukraine.

WSJ reported Tuesday that some OPEC members were considering the idea of suspending Russia in an oil production deal.

EU leaders also were expected to ban European insurers from covering ships carrying Russian oil, WSJ reported.

With sanctions aimed at Russia for its Ukraine invasion, WSJ reported that traders have been working to obscure the origins of Russian oil — concealing it in blended refined products such as gasoline, diesel, and chemicals.

The U.S. Office of Foreign Assets Control typically defines origin using 25% or more, WSJ reported.

As has been done in the past to transport sanctioned Iranian and Venezuelan oil, Russian oil is also being transferred between ships at sea — in the Mediterranean and Black Seas — before heading toward China, India, and Western Europe, WSJ reported.

It isn't illegal for international refiners to buy Iranian, Venezuelan, and Russian oil, but such trades are crippled by related, extensive restrictions and sanctions. Therefore, customers try to conceal the shipments.

The International Energy Agency reported that Russian oil exports rebounded in April, after dropping in March — they rose by 620,000 barrels to 8.1 million barrels daily, close to its prewar levels.

India's imports have skyrocketed to 800,000 barrels a day since the war began, compared with 30,000 barrels a day previously, WSJ reported.

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Shippers and refiners of Russian oil are evading sanctions and getting the product to market by obscuring its origins, The Wall Street Journal reported Wednesday.
russian oil, traders, evade, sanctions, indian refineries
445
2022-09-01
Wednesday, 01 June 2022 08:09 AM
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