New Turmoil Hits Russia: 185 Million Barrels of Oil at Risk

Russia is facing mounting challenges in selling its crude oil as stockpiles on offshore tankers surge, reflecting weakened demand and escalating pressure from trade sanctions, according to Reuters.

Ship-tracking data reveals that Russian crude oil stored on offshore tankers has risen by approximately 48% since late August, reaching nearly 185 million barrels. Many shipments remain unsold, lingering for months off key consumer markets.

In the four weeks leading up to December 21, Russia’s seaborne crude oil exports averaged 3.87 million barrels per day, an increase of about 200,000 barrels per day compared to the same period last year. This marks the highest level since May 2023.

The export surge is partly attributed to weakened domestic refining activity. Output at Russian refineries remains below seasonal norms, forcing Moscow to divert more crude oil to international markets.

However, much of this oil fails to reach buyers. Reuters reports that numerous Russian tankers are idling offshore for extended periods as traders struggle to sell cargoes without accepting steep discounts. At least 20 Russian tankers are currently anchored near ports in China and India, awaiting permission to unload.

Oversupply pressures have driven Russian oil prices to prolonged lows. Urals crude, Russia’s benchmark grade, has declined for 12 consecutive weeks, trading at around $33–34 per barrel—nearly half the price of Brent crude, which stands at $61–62 per barrel. Compared to its mid-July peak, Urals crude has plummeted by approximately 40%, or $25 per barrel.

The decline is not limited to Urals; ESPO crude, exported from Russia’s Far East, has also seen a sharp drop, falling roughly 30% over the same period.

Market conditions have grown more challenging as the U.S. intensifies pressure on countries purchasing Russian oil. In August, U.S. President Donald Trump doubled tariffs on imports from India, specifically targeting New Delhi’s continued purchases of Russian crude—a critical revenue source for the Kremlin and its military operations in Ukraine.

These developments highlight the increasingly complex dilemma facing Russia in the global oil market: exporting more while struggling to sell, as plummeting prices erode energy revenues—a cornerstone of its economy.