Despite U.S. Sanctions, Russian Oil Continues to Flow to China Through New Shipping Routes

Despite the latest U.S. sanctions, Russian crude oil exports from the Pacific port of Kozmino remain largely unaffected, with traders and shippers adapting to new restrictions by employing a fresh fleet of vessels, Bloomberg reported on February 19.

Between January 30 and February 16, none of the 16 tankers that loaded ESPO crude from Kozmino were on the U.S. sanctions list. Notably, half of these vessels were new to the ESPO trade, highlighting how quickly the market has adjusted to the latest measures imposed by Washington in early January.

Oil market watchers continue to track Russia’s ability to bypass Western restrictions and keep its crude flowing, especially as direct talks between the Trump administration and Moscow in Saudi Arabia spark speculation about whether U.S. sanctions might ease as part of a Ukraine settlement.

A similar pattern has been observed with Iranian crude shipments, which have also remained resilient despite U.S. attempts to crack down.

Many of the newly enlisted tankers sail under “flags of convenience” from Panama, the Cook Islands, Sierra Leone, and Djibouti, data shows.

All but one of the ESPO crude shipments were destined for China, with key ports including Dongying, Huizhou, and Dongjiakou. Most of the vessels are owned by companies registered in Shanghai, Hong Kong, and Seychelles, according to Equasis records.

While the latest U.S. sanctions initially drove up freight rates for Kozmino-to-Asia shipments, prices have since retreated from their peak.

The current shipping cost for the short three- to five-day journey to China is around $5 million, up significantly from $1.5 million before January 10, but lower than the highest levels seen after the sanctions took effect.

Earlier, reports emerged that the Group of Seven was considering revising its price cap on Russian oil as part of efforts to limit Moscow’s revenue and increase economic pressure amid the war in Ukraine.