Following Russia’s special military operation in 2022, when Western sanctions bore down on Russia and Russian exports, Moscow found new trade partners in Asia to replace those in Europe that it lost. The biggest in this regard were India and China, both of which massively increased their imports of Russian fossil fuels—often at discounted prices.
However, the new round of sanctions imposed on Russian gas companies and oil tankers by the outgoing Biden Administration on Jan. 10 show the U.S. is aiming to crush it. The sanctions target 183 shipping vessels that had largely been used to transport sanctioned Russian oil to third countries—and thereby evading the sanctions. According to an analyst from the analytics company Kpler, 143 of those sanctioned vessels accounted for 42% of Russia’s entire seaborne fuel exports during 2024, reported Reuters. The vast majority of this went to China and India. “These sanctions will significantly reduce the fleet of ships available to deliver crude from Russia in the short term, pushing freight rates higher,” the analyst said.
Reuters further reported that the sanctions “will force Chinese independent refiners to cut refining output going forward, two Chinese trade sources said.” A Singapore-based analyst forecast that “It’s going to drop off a cliff.”
India imports 1.764 million bpd of Russian crude oil, comprising 36% of India’s total imports, while China imports 2.159 million bpd, or 20% of its total imports. These two countries stand to be hit the hardest by the sanctions, after Russia.
