ongc: ONGC struggling to move Russian oil to Asia as sanctions bite: Report – Times of India

NEW DELHI/LONDON: Oil and Pure Fuel Corp (ONGC) is struggling to discover a vessel to ship 700,000 barrels of crude from Russia’s Far East, in a rising signal that advanced trades involving one among Moscow’s largest companions are being interrupted by Western sanctions, sources say.
A number of Indian firms together with ONGC have stakes in Russian oil and gasoline property, and India has been shopping for extra Russian crude since Moscow invaded Ukraine, snapping up the favored Urals crude grade, whereas different consumers have shunned Russian exports.
ONGC has a 20% stake within the Sakhalin 1 challenge that produces a Russian grade referred to as Sokol, which ONGC exports by way of tenders. Sokol is generally purchased by North Asian consumers and loaded from South Korea.
Nevertheless, Moscow’s capability to ship that grade, which requires vessels that may break by way of ice, is changing into tougher resulting from issues from shippers over reputational danger and the rising problem for Russian property to search out insurance coverage protection.
Usually, cargoes of Sokol oil are first shipped from the De-Kastri terminal in Russia’s Far East utilizing ice class vessels to South Korea, the place they’re then reloaded onto a standard tanker.
Indian refiners hardly ever purchase the Sokol grade, as tough logistics make the crude expensive. There are a restricted variety of ice class vessels within the international service provider fleet that may be deployed at any time.
ONGC depends on ice-class vessels supplied by Russia’s state-owned Sovcomflot (SCF) for the transportation of crude to Yoesu port in South Korea, and from there the Indian firm exports to consumers, principally in North Asia.
Nevertheless, sanctions imposed on Russia by america, Britain, the European Union and Canada after Moscow’s invasion of Ukraine, along with particular restrictions on SCF, are making it tougher for Russian ships together with SCF’s fleet to keep up insurance coverage and reinsurance cowl for voyages, delivery sources stated.
Delivery firms are additionally much less keen to maneuver Russian oil in Asia, fearing the potential reputational dangers concerned with charters, the delivery sources added.
Final month, ONGC didn’t obtain any bids in its tender for export of Sokol as consumers backed out resulting from Western sanctions.
That led to ONGC promoting one cargo every to Indian state refiner Hindustan Petroleum Corp and Bharat Petroleum Corp.
BPCL’s cargo was scheduled for lifting early subsequent month from Yeosu port in South Korea, whereas HPCL was awarded the cargo for lifting in end-Might, based on delivery sources.
BPCL had floated an enquiry to constitution a vessel from the South Korean port and sought to ebook the vessel Atlantis for early Might shipments, delivery studies present.
The fixture failed, nevertheless, as ONGC couldn’t prepare a vessel to Yeosu port partly resulting from points with securing insurance coverage for the voyage, sources stated.
ONGC, HPCL and BPCL didn’t reply to Reuters emails in search of remark.
This yr, India has purchased greater than twice as a lot crude from Russia within the two months since its invasion of Ukraine because it did in all of 2021.
Russia’s maritime sector is grappling with the winding down of providers together with ship certification by main international suppliers reminiscent of Britain’s LR and Norway’s DNV.
Marine gas sellers have stopped serving vessels flying the Russian flag at main European hubs together with Spain and Malta in one other blow to Moscow’s exports, sources with information of the matter instructed Reuters.
The EU in March listed SCF amongst Russian state-owned firms with which it was “prohibited to straight or not directly have interaction in any transaction” after a wind down interval ends on Might 15.

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