Russia’s oil business in the Arctic is halted due to US sanctions

Russia’s huge Arctic oil business has faced major disruptions due to US sanctions on tankers and storage facilities, halting the supply of crude that had previously been snapped up by Asian buyers in storage. This is reported by Reuters, writes UNN.

Details

It is noted that all three Russian Arctic oil fields – Novy Port, ARKO and Varandei, with an output of about 300,000 barrels per day – are facing disruptions.

The vessels and infrastructure needed for Russia’s Arctic oil business, which accounts for a tenth of seaborne oil exports, are unique.

Currently, Umba and Kola, as well as more than a dozen small tankers that are used as shuttle suppliers of oil from fields, have been sanctioned by the United States.

At least 15 tankers targeted by US sanctions on Friday, including the Sturman Shcherbinin, Mykhailo Ulyanov and Aulis, have been actively involved in the transportation of Russian Arctic varieties over the past two months.

Smaller shuttle tankers have been designed to operate in northern seas and have a specific design that allows them to load more oil without compromising their wake clearance.

This could leave Russia with millions of barrels of unsold oil in storage. Limited storage capacity at all three projects means several weeks of loading disruptions could result in reduced production.

At the same time, the publication adds that Lukoil, which produces at the Varandey field, was not included in the sanctions list.

Since all oil from Arctic projects is intended for export, there is no logistics system to feed it into the domestic Russian pipeline system.

This means that in the absence of buyers for these types of oil, volumes will have to be stored in floating storages.

We will remind

Tankers with 2 million barrels of Russian oil changed course and stopped off the coast of China after US sanctions. Shandong Port Group has banned sanctioned tankers from entering ports.