**Russian Oil Trade with China and India Hits a Roadblock**
The trade of Russian oil for March delivery to China and India has come to a standstill. This is due to rising shipping costs triggered by US sanctions imposed on January 10.
**US Sanctions Cause Shipping Headaches**
The US sanctions target nearly 200 vessels in Russia’s “shadow fleet,” major oil companies, and associated entities. This makes it difficult for Moscow to export crude oil. As a result, the cost of shipping Russian oil has increased significantly.
**Rising Shipping Costs Cause Trade Stalemate**
As shipping costs have gone up, there is now a big gap between what buyers are willing to pay and what sellers are asking for. In China, offers for March ESPO Blend crude from Russia’s Pacific port of Kozmino have jumped by $3-$5 per barrel over ICE Brent on a delivered ex-ship (DES) basis.
**India Also Affected**
In India, there is also a decline in Russian oil offers. Bharat Petroleum Corp Ltd reported that no new offers for March deliveries have been received, with expectations of a drop in cargoes compared to January and December.
**Indian Banks Block Payments**
Adding to the strain, Indian banks have blocked payments for Russian oil imports following the latest US sanctions. This makes it even harder for Russia to export crude oil.
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