In a strategic maneuver to combat a surplus of Sokol oil exacerbated by Western sanctions, Russia is actively considering selling oil to China. The move comes as six tankers laden with Russian oil, despite being sanctioned by the United States, set sail towards Chinese ports this week.
LSEG, Kpler, Vortexa shipping data, and industry sources have reported on the uncertain fate of these tankers, raising questions about whether they will be permitted to unload their cargo. The potential sale to China holds promise for alleviating one of the most significant gluts of Russian oil in recent years, a situation triggered by payment issues amidst sanctions linked to Russia’s military actions in Ukraine.
The decision by China to accept or reject the oil could have profound implications for Moscow, which has been grappling with challenges in Sokol oil sales and payments amid mounting sanctions pressure from the West. With over 10 million barrels of Sokol oil from Sakhalin-1 stranded in tankers without buyers over the past three months, the stakes are high for both Russia and China.
The Russian-flagged tanker NS Century, carrying 698,000 barrels of Sokol oil and sanctioned by the U.S., recently anchored near China’s Qingdao port, adding to the intrigue surrounding the situation. As other sanctioned tankers make their way to Chinese ports for potential offloading in early March, including vessels like Krymsk, Liteyny Prospect, Nellis, NS Antarctic, and Sakhalin Island, the global oil market awaits the outcome with bated breath.
The developments in this high-stakes energy saga underscore the intricate interplay between geopolitics, sanctions, and global oil trade dynamics. As industry experts analyze the potential impact of these sales on market trends and diplomatic relations, all eyes are on the unfolding narrative of Russia’s efforts to clear the Sokol oil glut through strategic engagements with China.