Despite Russia’s war in Ukraine and the addition of new sanctions, Sokol crude shipments from the Far East have sold out for next month, proving that the pariah nation continues to find buyers, Bloomberg reported.
Traders who spoke on the condition of anonymity shared confidential information that cargoes from the Sakhalin-I project will be delivered to buyers in Japan, South Korea, China, and India on a spot or term basis. Diesel produced by Sokol can be shipped to nations in north Asia within a week.
Many willing buyers are still searching for Russian oil as they either have trouble resisting the appeal of the cheaper crude or are having a difficult time finding replacement barrels as OPEC+ producers’ supplies are increasingly difficult to find.
In order to soften the economic fallout of Russia’s war in Ukraine, which is in its second month, the U.S. and its allies are planning to release massive amounts of strategic reserves.
SODECO, an oil and gas development company based in Japan, has sold Sokol cargoes to a Japanese refiner and a South Korean refiner via a term agreement, according to traders. They added that the company has sold shipments to two state-run refineries in India, the company said. Together, both have equity stakes in Sakhalin-I, along with Russian state-owned Rosneft PJSC and operator Exxon Mobil Corporation.
According to traders, Trafigura Group, which Rosneft supplies with Sokol, transferred cargoes to many of China’s private refineries, including Shandong province. They added that Exxon will use its share of Sokol in its own refineries. The program indicated that ten cargoes would be loaded in May.
According to traders, there were also offers to get Russian ESPO crude delivered to Shandong, which loads from the Far East. In fact, some sellers have begun accepting yuan in order to lure more buyers who may be hesitant due to payment issues, such as letters of credit.
As well as being shipped from ports in the Baltic and Black Seas, the Urals crude from Russia reaches India and China. As a result, India has been warned not to align itself with Russia by the Biden administration.