China and India have halted imports of Russian oil due to American sanctions.

China and India are halting trade in Russian oil due to unfavorable tariffs. This decision was triggered by the imposition of U.S. sanctions against Russian tankers, reported Reuters on January 27.

According to the agency, offers for Russian oil sales for March 2025 have surged by $3-5 per barrel above the ICE Brent price for deliveries from vessel (DES) to China. This occurred after the cost of transporting Aframax oil tankers skyrocketed by several million dollars.

“Before the January sanctions, high winter demand and stable prices for competing grades from Iran led to spot premiums for ESPO Blend oil to China rising nearly to $2 per barrel, the highest level since the start of the war in Ukraine in 2022, which triggered discounts of up to $6,” the agency stated.

According to the Chief Financial Officer of Indian company Bharat Petroleum Corp Ltd, the enterprise has not received any new offers for March deliveries. Furthermore, the company expects that the number of shipments offered for this period will decrease compared to December 2024 and January 2025.

It is noted that in 2024, Russian oil accounted for 36% of India's imports and nearly 20% of China's imports. Analytical firm Kpler reported that U.S. sanctions aimed at Russian tankers have significantly impacted imports. Specifically, vessels transporting about 42% of total Russian oil exports are now under economic restrictions, primarily operating with China. Nevertheless, tankers are still gradually unloading oil in China and India during the sanctions waiver period.

According to India's Minister of Petroleum, Pankaj Jain, the U.S. has outlined a deadline for the withdrawal of tankers by February 27 in accordance with the sanctions. At the same time, payments on sanctioned vessels must be completed by March 12.

Additionally, tankers are facing unloading delays in Chinese waters – even though they meet the requirements for the sanctions waiver period. For instance, one of the Russian ships, Huihai Pacific, is still waiting to unload in Tianjin after loading ESPO cargo on January 5.

Consulting firm FGE reported that U.S. sanctions and the ban on the import of Russian oil, imposed earlier this month by China's Shandong Port Group, will lead to oil refineries in Shandong province losing up to 1 million barrels per day in the near future. Analysts indicate that both China and India will maintain a low level of imports of Russian Far East crude oil. Currently, India is seeking alternative offers from the Middle East, Africa, and the U.S. for March and April 2025.

Recall that on January 8, key oil ports in China closed access to the Russian “shadow fleet” that fell under U.S. sanctions. The port closure occurred amid the U.S. Treasury's imposition of sanctions on 35 tankers that are part of Iran's shadow fleet, except for vessels operated by NITC, during the period from October to December 2024. At the beginning of 2025, Washington imposed separate sanctions against “Sovcomflot.”