China and India have halted trade in Russian oil due to US sanctions, which have caused a sharp rise in tanker shipping costs, Reuters reports.
According to traders and shipping companies, trade in Russian oil that was loaded in March has stopped in Asia, as a large price gap between buyers and sellers has emerged in China.
This follows a surge in freight costs for tankers not affected by US sanctions.
Traders report that offers for Russian ESPO Blend crude oil, exported from the Pacific port of Kozmino, have risen to $3-5 per barrel to ICE Brent prices on a delivered ex-ship (DES) basis in China after freight rates for Aframax tankers on the route jumped by several million dollars.
Before the sanctions, strong winter demand and higher prices for competing Iranian oil had driven spot premiums for ESPO Blend crude to nearly $2 per barrel in China - the highest level since the start of Russia's full-scale invasion of Ukraine, which had previously led to discounts of up to $6.
Last year, Russian crude imports accounted for 36% of India's and nearly 20% of China's imports.
