Tanker Owners Are Turning Their Backs On Russian Oil

Owners of tankers have become reluctant to offer their vessels to load crude from Russia for fear that their future cargo could be breaching potential sanctions if the West decides to deploy the harshest sanctions against Russia after it invaded Ukraine early on Thursday.

Several shipbrokers and tanker owners told Bloomberg on Thursday that they avoid offering their vessels to load Russian crude.

Two-thirds of Russia's crude oil exports are seaborne, from ports in the Black Sea and the Baltic Sea.  

After Russia invaded Ukraine on Thursday, the United States, the European Union, and the UK vowed to impose another round of sanctions against Moscow.

The first round of sanctions, while cutting some Russian banks from international markets and expanding sanctions on trading with Russian sovereign debt, was underwhelming, analysts said.

None of the first sanctions announced by the U.S. or the European Union, or the UK, targeted any Russian bank dealing with Russia's oil and gas transactions, which calmed the market that the West will not target energy supply from the country accounting for over 10 percent of global oil supply and nearly 40 percent of the natural gas Europe imports.

Earlier this week, a senior U.S. State Department official said that sanctions that the United States imposed on Russia for recognizing two breakaway regions in eastern Ukraine and sending troops there were not targeting Russian oil and gas flows, nor would they target such flows in subsequent sanctions that could be imposed in the near future.

This morning's invasion, however, prompted world leaders to vow "massive" strong sanctions against Russia. U.S. President Joe Biden said that "the United States and our Allies and partners will be imposing severe sanctions on Russia" later on Thursday.

Ursula von der Leyen, President of the European Commission, said that "The sanctions that we are preparing will have a heavy impact. Russia's economy has already faced intensified pressure. These pressures will now accumulate."

 By Tsvetana Paraskova for Oilprice.com

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