Amidst the impact of sanctions, the Russian tanker Liteyny Prospect has made its way to the Chinese port of Huanghua to unload its 700,000-barrel shipment of Russian Sokol crude, according to sources familiar with the situation. This move marks a significant step in alleviating the disruptions caused by restrictions on Moscow’s oil trade.
Liteyny Prospect is part of a group of six vessels transporting Sokol crude, with India facing obstacles in importing this oil due to payment challenges. While five of the ships have been floating at sea this week following recent U.S. sanctions on the Russian oil fleet, Liteyny Prospect successfully docked at a berth near Cangzhou city in Hebei province on Wednesday, as reported by shipping data from LSEG, Kpler, and Vortexa.
Despite the docking of Liteyny Prospect, there remain uncertainties surrounding the remaining five ships and their ability to discharge their cargoes. Port authorities, mindful of potential secondary sanctions, are cautious in their approach to allowing vessels under sanctions to dock, according to trade sources.
While there is no explicit guidance for ports on handling sanctioned vessels, it is likely that buyers have been informed that customs clearance is not an issue. However, ports may restrict the storage of oil for prolonged periods.
The backlog of Sokol tankers represents a significant disruption in Russia’s oil trade since Western sanctions were imposed on Moscow due to military actions in Ukraine. Sokol crude is a low-sulfur grade exported from Russia’s Sakhalin island by Sakhalin-1 LLC, a company under the control of oil giant Rosneft.
Rosneft, the parent company, has not yet provided a comment on the situation. The U.S. Treasury’s Office of Foreign Asset Control (OFAC) recently sanctioned Sovcomflot (SCF) and identified 14 crude vessels, including Liteyny Prospect, as assets in which SCF has an interest.
OFAC granted general licenses permitting the offloading of crude oil from the designated vessels for 45 days and allowing transactions involving other Sovcomflot tankers. These sanctions are aimed at curbing Russia’s oil revenues that could potentially support its military activities in Ukraine.