India Attempts to Find Liner to Shift Crude from Russia
The Oil and Natural Gas Corporation of India is trying to find a ship that will be able to transport 700,000 barrels of crude oil from the Far East of Russia. In fact, this is a growing sign that Western sanctions are terminating the complex trade involving one of Moscow’s most significant partners. Several Indian companies, including ONGC, have stakes in Russian oil and gas assets. India bought more Russian raw materials; After Putin invaded Ukraine and took the class of popular Ural raw materials, other buyers avoided Russian exports.
ONGC has a 20 percent stake in the Sakhalin 1 project, producing Russian quality – Called Sokol, which ONGC carries out through export tenders. Sokol is mainly bought by North Asian buyers and shipped from South Korea. However, Moscow’s ability to send this class, which requires ships to break through the ice, becomes more difficult; due to the sender’s concerns about the reputation risk. Also, because of the growing difficulty of finding insurance coverage for Russian assets.
Usually, cargo oil shipments are shipped for the first time to the Far East of Russia, from the De-Castro terminal, using ice-class ships to South Korea, where they are sent by conventional tanker. It is worth noting that Indian processing manufacturers rarely buy Sokol because complex logistics make raw materials expensive. The global merchant fleet has a limited number of ice-class ships that can deploy. The ONGC relies on ice-class vessels secured by Russian state-owned things to transport crude oil to South Korea. The Indian company exports to Yeosu port and buyers, mainly in North Asia.
Sanctions and Russia-India Relations
However, sanctions against Russia following the Russian invasion of Ukraine by Britain, the United States, the European Union, and Canada and specific restrictions on the SCF make it difficult for Russian ships, including the SCF fleet, to maintain insurance and reinsurance cover for voyages.
Shipping companies are also less willing to ship Russian oil to Asia; For fear of potential reputational risks associated with charters. Last month, ONGC did not receive a tender for Sokol exports. Buyers backed down due to Western sanctions. This led ONGC to sell each consignment to India’s state-owned processing company Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
The BPCL cargo shipment should come early next month from the South Korean port of Yeosu. According to shipping sources, the HPCL shipment delivery time was in late May.
The BPCL launched an investigation into hiring a ship from a South Korean port. Tried to book the boat Atlantis for shipping in early May. Nevertheless, the controversy failed because the ONGC could not arrange the ship due to travel insurance problems. This year, India bought twice as much crude oil from Russia in two months as it did in 2021, months after its invasion of Ukraine.
Russia’s maritime sector is struggling to cut services, including certification of vessels by leading foreign providers such as the Norwegian DNV and the British LR. Marine fuel sellers stopped service of ships flying the Russian flag to major European centers, Including Spain and Malta. This is another blow to Moscow’s exports.
The EU listed SCF among Russian state-owned companies in March, with whom It was prohibited from engaging in any transaction, directly or indirectly, after the end of the termination period on 15 May.
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