India’s Oil and Natural Gas Corp, better known as ONGC, has been grappling to get hold of a vessel for shipping 700,000 barrels loaded with crude oil from the Far East to Russia, in a sign that shows complex trades revolving around one of the largest partners in Moscow was interrupted by Western sanctions.
Several firms in India, including ONGC, have their stakes in Russia’s oil and gas assets. India is also been buying more of its crude from the time Moscow launched its invasion of Ukraine, snapping up Urals crude grade, while many other purchasers have decided to shun Russia’s exports.
ONGC holds a 20% stake in the Sakhalin 1 project, which has been producing Russian-grade Sokol. ONGC exports the same via its tenders. Sokol is bought by North Asia’s buyers and is reportedly loaded from South Korea.
Moscow’s ability of shipping that grade that needs vessels, which can break through the ice, is turning out to be harder owing to concerns coming from shippers regarding reputational risks and more difficulties for Russia’s assets to secure insurance coverage.
Sokol oil cargoes are shipped first from Russia’s De-Kastri terminal with the help of ice-class vessels. The cargo s first transported to South Korea, wherefrom it is reloaded on a conventional tanker.
Indian refiners buy the Sokol grade, as logistics-related issues make crude more expensive. The fleet of the global merchant has a rare number of ice-class vessels that may be deployed at any time.
ONGC depends heavily on vessels of the ice-class that are offered by Russian Sovcomflot (SCF) for transporting crude to South Korea’s Yoesu port and from there the Indian firm exports to buyers, especially those located in North Asia.
But, sanctions that are levied on Russia by nations like the US, Canada, Britain, and the EU following Moscow’s invasion of Ukraine, besides specific limitations on SCF, are making it more difficult for Russia’s ships, including the SCF’s fleet to maintain reinsurance and insurance covers for voyages.
Shipping firms are hardly willing to move oil from Russia to Asia, fearing the reputational risks entangled with the charters. Over last month, ONGC was unable to receive bids for exporting Sokol as potential buyers had refrained from going forward owing to Western sanctions. That has resulted in ONGC selling a cargo each to Hindustan Petroleum Corp and Bharat Petroleum Corp, better known as BPCL, India’s state refiner.
Per shipping sources, BPCL’s cargo was supposed to be lifted early in the coming month from South Korea’s Yeosu port, while HPCL had been awarded the cargo to be lifted in May end. BPCL had floated an inquiry to charter one vessel and had decided to book Atlantis from the South Korean port for shipments to be carried out in early May.
The fixture was unsuccessful as ONGC was unable to find a vessel owing to challenges associated with securing insurance for the voyage. India has purchased more than twice the amount of crude from Russian entities in two months since the war in Ukraine as it had done throughout 2021.
The Russian maritime sector has been going on grappling with the winding down of services by leading foreign providers like Britain’s LR. Marine fuel suppliers are no longer serving the vessels that fly the flag of Russia at European centers like Malta and Spain in yet another blow to the exports of Moscow.
In March, the EU reportedly listed SCF as a Russian state-owned firm and “prohibited to indirectly or directly engage in transactions with it after the wind-down period ends on 15 May.
Shipping News You Would Like:
The information contained in this website is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Latest Shipping News You Would Like:
Get the Latest Maritime News Delivered to Your Inbox!
Our free, fast, and fun newsletter on the global maritime industry, delivered everyday.