US sanctions against Russian oil will leave more cargo in the sea without buyers: analyst

US sanctions against Russian oil will leave more cargo in the sea without buyers: analyst

On Tuesday, US President Joe Biden imposed a prohibition immediately on Russian oil and other energy imports on the country’s invasion to neighboring Ukraine.

US restrictions on oil and Russian gas imports tend to leave more cargo in the sea without buyers, and the European Union’s decision to continue imports could not make many differences to fall apart in Russian oil trade, analysts said on Tuesday.

President U.S. Joe Biden on Tuesday imposed a direct ban on Russian oil and other energy imports in retaliation for the invasion of Ukraine and the UK said it would remove imports at the end of 2022.

The European Union did not join the ban because it was more dependent on the supply of Russian oil and gas. Gas flowing to Europe has so far stable since the invasion, which Russia calls “special military operations”, but Moscow on Monday warns that sanctions against Russian oil can encourage it to close the main gas pipes to Europe.

Disorders in oil trade, caused by traders who clearly have Russian inventory because of their concerns unwittingly falling from sanctions imposed on Russia, it would likely deteriorate after the US ban, traders said. Buyers will also worry about the type of hit reputation taken by Shell on weekends to buy Russian oil.

Shell said before will stop buying oil from Russia and cutting relationships with the country fully. Shell’s decision came a few days after it faced nine criticisms to buy Russian oil with steep discounts – transactions two weeks ago will be routine – underlining how Moscow’s pariah status grew even on the market he used to dominate.

Russia exported around 7 million barrels per day with raw and refined fuel, around 7% of global supply.

“Directing the flow of trade requires time. This creates a dislocation on the market,” said Roger Diwan, Vice President of Financial Services in the Global S & P. “The more you have this type route and we don’t know where the volume runs, the physical world starts gummed.”

New sanctions can make more cargo already on the water that struggles to find buyers, analysts said.

As Biden announced a US ban, there were 34 Russian oil cargo over 26 ships to the United States, most of which were fuel oil but covered 3.2 million barrels of crude oil, according to Seigle, citing Vortexa data, quoting.

One trader based in A.S. Saying that when it comes to trading Russian oil, the situation “cannot be maintained.”

Goldman Sachs estimates that more than half of Russian oil exported from the port remains unsold. “If sustainable, this will represent a decrease of 3 million BPD in the export of seaborn crude oil and petroleum products,” he said on Tuesday.

JP Morgan estimates that about 70% of Russian sea oil struggles to find buyers.

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