After Europe closed its doors to Russian supplies last month, trade sources and data show that Russia is now sending more Arctic crude oil to China and India at steeper discounts.
Arctic levels Arco, Arco/Novy Port, and Varandey do not typically travel to the East but are now relocating farther afield as a result of the European Union, G7 countries, and Australia capping the price of Russian oil in December, in addition to an EU embargo on the shipping of Russian crude. Due to higher shipping costs, vendors are offering greater discounts on Russian crude.
A trader from Singapore said, ‘Normally, all of these Arctic crudes go to the EU, but now they have to go somewhere else.’
According to Refinitiv data, Arctic crude exports to India have been rising steadily since May, reaching a record 6.67 million barrels loaded in November and 4.1 million barrels in December. Arco and Arco/Novy Port, which were produced at fields run by Gazprom Neft, made up the majority of the supplies (SIBN.MM).
The higher quality Novy Port grade, from the Novoportovskoye field, is a medium to light sweet crude. Arco crude, from the Prirazlomnoye field, is a heavy sour grade.
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