Russia’s flagship Urals crude oil is increasingly heading to Asia, as European buyers scale back purchases following Russia’s invasion of Ukraine and international sanctions aimed at isolating Moscow.
Asia will take about 1.24 million tons of the grade that loaded in March, the highest volume for any month since April 2020, according to tanker-tracking data compiled by Bloomberg and port agent reports. That equates to about 293,000 barrels a day.
While Russian crude itself is largely not subject to formal sanctions, many Western companies are shunning the oil for reasons including confusion around what’s permitted, concerns about reputational damage and uncertainty over future restrictions. Urals has been offered at the deepest discounts on record in recent weeks, and barrels have been flowing east.
Much of the Russian grade will be refined at plants in India, where purchases rose to their highest level since at least October 2018, when Bloomberg started tracking shipments to Asia from Russia’s three main western ports.
More Urals oil is likely to head to Asia, as two supertankers, which can hold 2 million barrels of crude each, are in Europe for ship-to-ship transfers from smaller vessels.
At the same time, Europe’s refineries—long the main destination for Russian Urals crude—are cutting back in the wake of the country’s invasion of Ukraine.
About 4.4 million tons of Urals is destined for northwest Europe and the Mediterranean this month. That’s about 60% of the loadings, declining from an average of 83% last year.
