Russia sends more Arctic oil to China

SINGAPORE: Russia is sending more crude oil produced in the Arctic region to China and India, and at steeper discounts, after Europe slammed its doors shut on Russian supplies last month, trade sources and data show.

Arctic grades Arco, Arco/Novy Port and Varandey do not normally head East but are now finding new homes further afield after the European Union, G7 nations and Australia introduced a price cap on Russian oil in December, on top of an EU embargo on Russian crude by sea. Sellers are selling the Russian crudes at bigger discounts as they absorb higher shipping costs.

"All these Arctic crudes usually go to the EU but now they have to go elsewhere," a Singapore-based trader said.

Arctic crude exports to India have steadily increased since May, with a record 6.67 million barrels loaded in November and 4.1 million barrels in December, Refinitiv data showed. Most of the supplies were Arco and Arco/Novy Port produced at fields operated by Gazprom Neft.

Arco crude is a heavy sour grade from the Prirazlomnoye field while the better quality Novy Port grade, from the Novoportovskoye field, is a medium to light sweet crude.

Last week, India imported its first Varandey crude cargo that loaded in Murmansk port in late November, according to two sources and Refinitiv data.

The 900,000-barrel cargo onboard tanker Bear Alcor that sailed via Europe, the Mediterranean and the Suez Canal, was discharged at Cochin port in Kerala on Dec. 27 for refiner Bharat Petroleum Corp Ltd. The other two 600,000-barrel cargoes that loaded in November were discharged at Rotterdam in the Netherlands. It was not clear which companies bought these cargoes.