The United States has imposed its toughest sanctions yet on Russia’s oil sector, targeting major producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil. The move is expected to disrupt Russia’s Arctic oil logistics, stranding crude supplies previously snapped up by Asian buyers in storage.
The sanctions affect the transportation of three key Arctic oil grades: Novy Port, ARCO, and Varandey, which account for about 300,000 barrels of output per day. These grades are unique and require specialized ice-class vessels to reach floating storage facilities near Murmansk.
India and China, major buyers of Russian oil, have started looking for alternative suppliers as they refuse to accept oil from sanctioned tankers. This could lead to increased prices for US flagship WTI oil grade, which is also light and premium quality.
The absence of Russian Arctic oil grades in the market may force Gazprom Neft to curb output on both Novoportovskoye and Prirazlomnaya offshore platforms. The company produces around 300,000 barrels of oil per day, but its storage capacities are limited, which could lead to a few weeks of loading disruptions.
Lukoil’s Varandey oil supplies face an additional challenge as the cost of shipping directly to international markets is high and requires time to fetch replacement tankers. The situation highlights the complexities of Russia’s Arctic oil business and the impact of US sanctions on global energy markets.
Source: https://www.reuters.com/business/energy/russias-arctic-oil-feels-chill-us-sanctions-2025-01-14