The oil tanker NS Century, which is subject to US sanctions, docked at the Chinese port of Qingdao late on March 14 to unload its load of Russian crude oil, according to LSEG shipping data, AlArabiya reported.
The Dubai-based affiliate of the Russian shipping corporation Sovcomflot operates the Russian-flagged tanker, transporting about 700,000 barrels of Russian Sokol crude.
Fourth tanker carrying Russian crude oil, sanctioned by the US, docked in Chinese ports
This is the fourth tanker carrying Russian Sokol crude oil, sanctioned by the US, that arrived in Chinese ports this month to reduce the stock kept aboard ships.
However, the earlier ships—Liteyny Prospect, Krymsk, and Nellis—moored while US sanctions pertaining to Russia’s war in Ukraine were temporarily lifted.
On November 16, the US Treasury’s Office of Foreign Asset Control (OFAC) sanctioned three tankers, including NS Century, for exceeding the $60 per barrel price cap on Russian crude oil exports. Additionally, it granted general licenses that allowed the three ships to discharge other cargo or crude oil until February 14.
OFAC reports that Gallion Navigation Incorporated, based in the United Arab Emirates, is the registered owner of the NS Century.
The goal of the G7-led price ceiling on Russian oil, which went into effect in December 2022, is to limit the amount of money Russia has available for its war of aggression in Ukraine by limiting the availability of insurance and other services from the West to shipments that cost less than $60 per barrel.
Beijing has declared that China’s regular trade should be respected and protected and that it rejects “unilateral penalties”.
After sanctions-related payment and transportation problems caused exports of light sweet Sokol crude to India to decline, China emerged as the world’s largest oil lifter.
Sakhalin-1 LLC, a subsidiary of oil giant Rosneft, exports low-sulfur, light-grade Sokol oil from the De Kastri facility on Russia’s Sakhalin island.
China became the largest importer of Sokol crude oil
In February, China became the largest importer of Sokol crude oil after shipments to India fell due to payment and delivery problems caused by Western sanctions against Russia.
Kpler estimates that China’s imports of Sokol crude oil increased this month and may reach an all-time high of 379 thousand barrels per day. The data did not include oil from two sanctioned Russian tankers.
At the end of 2023, Russia became the largest supplier of crude oil to China, overtaking Saudi Arabia. Reuters reported this on January 20, citing data from Chinese customs.
According to these data, oil supplies from Russia to China in 2023 amounted to 107.02 million tons, which is equivalent to 2.14 million barrels per day. This is a record for fuel supplies in the history of relations between China and Russia, and it is also much more than other oil exporters to China—Saudi Arabia and Iraq—the agency notes.
At the same time, China has reduced its oil purchases from Saudi Arabia in favor of Russia by 1.8 percent (to 85.96 million tons). However, China’s total crude oil imports in 2023 rose to a record 563.99 million tons, Reuters reported.
Observers note that China utilizes intermediaries to transport Russian oil and insurance in order to circumvent the sanctions imposed by the West on Russia.
Chiny buys Russian crude oil and exports gasoline and jet fuel to Europe
At the end of 2023, Russian Deputy Prime Minister Alexander Novak said that China accounted for about 45–50 percent of Russian oil exports, while India’s share had grown from almost zero to 40 percent in two years. In 2023, oil exports to Europe from Russia decreased from 40–45 percent to 4-5 percent of the total supply, Novak said.
At the same time, European countries buy oil products from India and thus indirectly pay for fuel in Moscow, although the EU has imposed an embargo on oil supplies from Russia because of its invasion of Ukraine.
In early January, the British newspaper Independent reported that in 2023, the EU’s imports of petroleum products from India increased by 115 percent to 231,800 barrels per day, the highest level in seven years.
According to the publication, India supplied oil products made from sanctioned Russian oil to 20 of the 27 EU countries. The leader in such purchases was the Netherlands, which accounted for a quarter of the EU’s fuel imports from India. France purchases another 23 percent of petroleum products.
Germany also imports petroleum products from India: gasoline, jet fuel, and diesel fuel. Germany accounts for 7 percent of total fuel supplies from India to the EU.
Halting Russia’s oil profits is key to stopping Putin’s war
As Russia begins to feel the full impact of Western sanctions on its economy and oil industry, the West must ensure that no sanctions evasion scheme based on the shadow fleet and evasion schemes can succeed.
Reducing Russian profits from oil sales will weaken its military capability, which is the main goal of the Western economic pressure on Moscow to force it to stop its war of aggression against Ukraine.
Supporting Putin’s war machine, after all, limits Western efforts to assist Ukraine in repelling the Russian invasion and moves the conflict closer to the EU’s frontiers.
Western governments should investigate such trade booms to identify sanctions violators, as punishment for sanctions evasion is one of the targets of the latest anti-Russian sanctions packages.
The Price Cap Coalition tightened its compliance regime
In 2022, the United States, the European Union, countries in the Group of Seven, and Australia imposed a $60 a barrel limit on Russian oil.
Shippers, insurance, finance, and other services are prohibited from handling Russian crude oil cargo unless it is sold at or below the $60 price cap. This measure ensures that the Kremlin cannot sell its oil for a higher price. The world’s key shipping and insurance firms are based in G7 countries, giving them leverage to set the price cap and make it difficult for Russia to sell its oil for a higher price.
Any purchases of Russian oil above the cap would violate the agreed-upon international sanctions. The cap aims to deprive the Russian government of revenue to sustain its war in Ukraine, compelling the Kremlin to either sell its oil at a discount or divert funds for a costly alternative oil shipping network.
In December 2023, the Price Cap Coalition announced changes to its compliance regime that the Treasury Department said would make it harder for Russia to bypass the cap. The Treasury Department announced that the coalition would request Western maritime service providers to obtain “attestations” from other businesses confirming the sale of Russian oil under the cap every time they transport it.
In 2023, new sanctions targeted firms across the United Arab Emirates, Hong Kong, and Turkey for allegedly violating the oil price cap.
