(Bloomberg) -- An oil tanker sanctioned in Washington’s harshest round of curbs against Russia’s energy industry has become the first such vessel to dock at the Russian port of Kozmino, where it’s loading a cargo of crude.
The Li Bai, a Panama-flagged Suezmax vessel, arrived at the Far Eastern port on Friday, ship-tracking data from Bloomberg and Kpler show, a week after the restrictions were announced. It’s loading about 733,000 barrels of ESPO crude, according to Kpler, and is showing India as its next destination, although that could change.
The global oil market has been rattled by the sanctions package, with futures pushing higher, freight rates - including on routes from Kozmino — surging, and some customers seeking alternative supplies. Still, the Li Bai’s journey is a sign of how buyers and sellers are still keen on trading Russian crude, and its movements will be closely followed to see how the new curbs operate.
Uncertainty remains about over what timeframe and conditions the sanctions will operate, and how authorities will respond. Washington has said that if a cargo was loaded on to a sanctioned vessel prior to Jan. 10, it’s still possible to unload those barrels through Feb. 27. New Delhi — one of Moscow’s largest buyers of crude — has signaled its intention to adhere to the rule.
Ship-tracking show that previous rounds of sanctions have been highly disruptive, suggesting Chinese and Indian oil buyers have been wary of falling foul of the Treasury. Since the US began sanctioning tankers involved in Russia’s oil trade in October 2023, only two of the 39 tankers targeted before last week moved more than single cargo.
Kozmino is a vital maritime node in Russia’s export network. It handles flows of the nation’s exports of ESPO crude, a grade named for the initials of a pipeline that takes the oil from east Siberia to the Pacific. At about 900,000 barrels a day, it is the nation’s largest single-port export stream.
China is another key customer, with ports in eastern Shandong province a hub for receiving cargoes from Kozmino. This week, the Mermar, which was also swept up in last week’s sanctions, had been unloading its ESPO cargo at a Shandong port.
Three other recently-sanctioned vessels have called at another port in Russia’s Far East. The Zaliv Baikal called at Sakhalin II on Jan. 11 and is bound for a Chinese port, data show. The Pavel Chernysh and Victor Konetsky docked at Sakhalin I on Jan. 11 and Jan. 18 respectively. Pavel Chernysh is on its way to an Indian port, while Victor Konetsky is headed for China.
