Russia’s seaborne crude oil exports hit a nearly two-year low last week, as reported by Bloomberg. This sharp decrease has been largely attributed to sanctions imposed by the Trump administration on major Russian oil companies, Rosneft and Lukoil.
In the week ending November 2, there were eight fewer tankers transporting oil compared to the previous week. Specifically, 26 tankers carried a total of 21.11 million barrels, down from 34 tankers transporting 26.41 million barrels.
On October 22, the U.S. Treasury announced these sanctions in response to Russia’s refusal to negotiate an end to its ongoing invasion of Ukraine, which has been underway for almost four years. The Russian government continues to label Ukraine’s leadership as a “Nazi” group that needs to be removed. Although some discussions between President Putin and President Trump are happening, no tangible results have been achieved.
Treasury Secretary Scott Bessent announced the sanctions, stating, “In light of President Putin’s refusal to cease this pointless war, we are taking action against Russia’s largest oil companies that fund the Kremlin’s military operations.” He also suggested that additional actions could follow and encouraged allies to adhere to these sanctions.
This Bloomberg report serves as early evidence of the sanctions’ impact on the Russian oil sector.
Over the four weeks ending November 2, average shipments from Russian ports dropped to 3.58 million barrels per day, which is a decrease of about 190,000 barrels per day from the previous count as of October 26. The averaged figures offer a clearer picture of the trend compared to the more erratic weekly numbers.
Part of the decline is said to stem from order cancellations by two of China’s largest oil processors, Sinopec and PetroChina, following the sanctions against Rosneft and Lukoil.
Reports from Kiev Independent suggest that the statistics regarding Russian tanker loadings may not provide the full picture, as some tankers are currently being used for floating storage rather than transporting oil.
China remains the largest importer of Russian oil, alongside India and Turkey. However, India seems to have slightly increased its purchases recently. Data from Kpler and OilX indicates a small uptick in imports from Russia in October compared to September. Yet, concerns linger that those shipments could decline as U.S. sanctions on key suppliers come into effect.
Meanwhile, indications suggest that Turkey may also be reconsidering its Russian oil imports. Despite being a major fuel buyer, Turkey has also made controversial purchases of Russian missiles and has actively supported efforts to end the Ukraine invasion by facilitating the shipment of grain and essentials. Recently, it was reported that Turkish refineries are starting to seek oil from alternative sources like Kazakhstan and Iraqi Kurdistan.
The Russian government initially downplayed the impact of these latest sanctions.
Maria Zakharova, a spokesperson for the Russian Foreign Ministry, characterized the measures as “extremely counterproductive” but asserted that the country is not facing major issues related to the sanctions. “We’ve developed a solid immunity against Western regulations, and we’ll keep progressing politically and economically,” she commented.
Interestingly, shortly after the sanctions announced, Lukoil seemed to contradict this positive portrayal and indicated plans for major divestments of its overseas assets to ensure survival.
Lukoil stated that asset sales would occur under a reduced license from the U.S. Office of Foreign Assets Control (OFAC), and if needed, the company would apply for license extensions to maintain international operations.
Many of these assets for sale are believed to be gas stations and refineries located in Turkey.
While no visible progress has been made toward resolving the war in Ukraine, President Trump indicated after a meeting with Chinese leader Xi Jinping that addressing this conflict remains a priority. He expressed openness to further discussions with China about this issue.
President Trump remarked, “We talked about it for a long time. We’ll collaborate to see if we can achieve something.” He acknowledged the tensions but maintained that cooperation is possible.
