By Julian Lee, Serene Cheong and Alex Longley (Bloomberg) —
The most aggressive Western sanctions imposed on Russia’s oil sector since Moscow’s invasion of Ukraine in 2022 threaten to disrupt global supply as buyers, led by China and India, scour the Middle East for alternative suppliers. Some estimates suggest the measures could halve Russian oil exports and their introduction has pushed Brent futures up by as much as $5 per barrel in recent days.
On January 10, the US Treasury’s Office of Foreign Assets Control sanctioned 161 tankers and traders involved in some 2,000 shipments since the invasion began. It also acted against Moscow-based marine insurers and two companies –Surgutneftgas and Gazpromneft– which in the first 10 months of last year accounted for almost 30% of Russia’s oil exports.
Some vessels have already been paralyzed while others are moving away from Russian ports where they were supposed to pick up cargoes, according to Bloomberg News ship-tracking data. These erratic movements last week are an indication of the impact of the latest round of sanctions, said Edward Fishman, a senior researcher at Columbia University and author of a forthcoming book on the use of sanctions as a form of economic warfare.
“It is even more likely that there will be a sustained market disruption,” Fishman added. “We could see a significant drop in Russian exports.”
Oil traders are now wondering how significant the drop could be.
The 161 tankers affected by the January 10 measures could carry around 1.4 million…
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