In early January, the Biden Administration intensified efforts to limit Russian oil exports by imposing sanctions on over 180 ships and various individuals and companies linked to Russian oil and gas production. Despite initial predictions, these sanctions have had a limited impact on Russian seaborne oil exports, demonstrating a surprising resilience. The trade has also largely remained unaffected by actions such as the Shandong Port Group’s ban on U.S.-sanctioned vessels and statements from India’s Oil Secretary regarding oil purchases from non-sanctioned sources.
During the first quarter of 2025, clean tanker exports showed a modest increase compared to the last three quarters of 2024 but experienced a significant decline when compared to the same period in 2024. Ongoing Ukrainian attacks on critical Russian refineries have continued to disrupt production capabilities and impact overall export volumes. To support this resilience, 72 new ships have entered the trade, even though they were previously inactive since the G7 established an oil price cap in December 2022.
Data from Signal Ocean indicates that many of these vessels are not under sanctions. During the first quarter of 2025, 162 sanctioned ships were involved in exporting Russian oil, collectively accounting for nearly 20% of the total exports. Notably, India and China were the primary importers, taking in around 80% of the cargo.
It is crucial to recognize that many countries do not acknowledge or comply with the sanctions imposed by the U.S., EU, and UK, nor do they adhere to the G7 price cap. Although the volume of seaborne exports has largely remained stable, sanctions have reduced the availability of ships, leading to increased freight rates. The International Energy Agency noted that rising freight costs have occasionally pushed oil prices below the USD 60 per barrel cap, prompting a shift to non-sanctioned tankers.
While current sanctions have not significantly diminished Russian oil exports, future market dynamics may pressure buyers to seek alternatives. An increase in OPEC production could lead to a surplus in oil supply, while slower economic growth due to ongoing trade tensions and decarbonization efforts might also affect demand.