U.S. Sanctions on Russian Oil Disrupt Crude Flows, Trigger Market Uncertainty
Sanctions targeting Russian oil exports under the TRUMP administration have taken effect, leaving tankers laden with Urals and ESPO crude grades adrift from the Baltic Sea to the South China Sea. Traders report widespread hesitation among buyers to accept these sanctioned cargoes, creating a logistical standstill.
The measures, announced one month prior as part of broader efforts to pressure Moscow during the Ukraine conflict, are already distorting trade flows. India's refiners have pivoted aggressively to Middle Eastern suppliers, pushing freight rates on the route to five-year highs. Meanwhile, over 48 vessels carrying Russian crude remain in limbo without clear destinations.
"Export volumes haven't collapsed, but the barrels aren't reaching endpoints," said Warren Patterson of ING Groep NV. "Prolonged disruptions could tighten supply—a scenario markets aren't pricing yet."
