New U.S. sanctions targeting Russia’s oil sector have caused sea freight rates for transporting Russian oil to surge fivefold.
The tanker shortage caused by these restrictions has significantly complicated logistics and reduced profits for Russian oil exporters, who are already under substantial economic pressure.
The situation is particularly challenging for transporting ESPO crude from the Kozmino port in the Russian Far East. The cost of transportation on Aframax tankers, which carry around 100,000 tons, has risen to $6.5–$7.5 million, compared to $1.5 million at the end of last year.
For shipments to India, transportation costs have increased even further, reaching $9–$10 million per trip. Reports indicate a shortage of vessels in the region, potentially leading to loading delays during the winter. This adds further strain to Russia’s oil industry, which is already grappling with economic isolation.
The sanctions have impacted more than 80 tankers previously used for transporting Russian oil to Asia, including the ESPO Blend crude.
This logistical disruption makes it harder to sell Russian oil, reducing its competitiveness and depriving Russia of critical revenue.
The effects of these sanctions once again demonstrate how international pressure can limit Russia’s ability to finance its aggressive actions, weakening its economy from within.
