Russia's Sakhalin has nowhere to store unsold Russian oil
The global sanctions against Russian oil are harming a variety of Russian projects, but those in the Far East are particularly hard hit. Raw minerals, in particular, are not exported from Sakhalin's coastal fields. They must be stored in tankers, which are now in short supply in the Far East.
Source: enkorr news outlet with reference to Bloomberg
Details: The vessels that have been drifting off the coast of Sakhalin for at least a week are currently storing about 6.3 million barrels of oil. This corresponds to about two days of total seaborne exports from all Russian ports in normal times (more than 3 million barrels per day).
Meanwhile, according to Bloomberg, in the week leading up to 9 February, these total exports fell by 25% to 2.3 million barrels. Less volatile data over the past four weeks showed a 6% decline to 2.83 million barrels, the lowest since early 2023.
Of the eight shipments of Sokol oil that were loaded onto blacklisted shuttle tankers after the introduction of large-scale US sanctions on 10 January, only one was unloaded. Two tankers have transferred the oil to a supertanker at the port of Nakhodka. The rest are adrift. If the oil is not unloaded from these "shuttles" transporting it from the Sakhalin-1 project, it will soon run out of available vessels to ship the extracted oil.
A similar picture is observed at Sakhalin-2. In addition to the three tankers that serve the project and are currently idle after being hit by sanctions, the Galactica tanker is used to transport raw materials. However, it does not show any desire to deliver the cargo to its destination port in China as soon as possible – the tanker's transponder shows a speed of one knot off the Japanese island of Hokkaido.
In the week leading up to 9 February, 21 tankers loaded 16.1 million barrels of oil in Russian ports; a week earlier, 29 vessels took on 21.34 million barrels. Suppliers have been forced to cut prices as sanctions have driven up shipping costs, and buyers are either not willing to pay extra money or are considering whether they should deal with Russian crude at all due to the increased risks.
As a result, the value of oil shipped last week fell by US$380 million (28%) compared to the week to 2 February and totalled US$990 million.
Background: Russian First Deputy Energy Minister Pavel Sorokin said that US sanctions against Russia should not affect oil trade with India.
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