India is one of the major buyers of Russian oil and most of this trade is done on Suezmax and Aframax tankers.
| Photo Credit:
TATIANA MEEL
A major decline in India’s import of Russian crude oil is sure to affect the global tanker trade patterns. Demand for very large crude carriers (VLCCs) is set to rise when India turns to its traditional buyers— West Asia.
Besides, the European Union’s (EU) 18th sanctions package lowers the price cap from $60 a barrel to $47.6, which would mean that Russia will have to expand its dark fleet strength to continue delivering its flagship grade Urals to buyers in India, China and Turkey.
According to a July 31 report by maritime consultancy Drewry, tightening of sanctions on Iranian and Russian oil by the US and EU may lead to notable shifts in global tanker trade patterns.
Rajesh Verma, Deputy Director of Tanker Shipping at Drewry, said although the US has not specified the penalty for buying Russian oil by India, any significant penalty might discourage the latter to buy Russian oil and look for alternate supplies.
Evolving patterns
India is one of the major buyers of Russian oil and most of this trade is done on Suezmax and Aframax tankers, he added.
Aframax vessels are ships with capacity of 80,000 and 120,000 deadweight tons (dwt), while Suezmax is between 125,000-180,000 dwt. On the other hand, Very Large Crude Carriers (VLCCs) can be between 200,000-320,000 dwt.
“However, any possible decline in India’s imports of Russian crude will lead to a significant increase in the country’s imports from other sources, especially the Middle East. In such a situation, the VLCC demand will increase at the expense of mid-size tankers as the former dominate the loadings in Arabian Gulf,” Verma anticipated.
On the lower price cap for Russian crude oil, Verma explained that the lower price cap of $47.6 per barrel will make it extremely difficult for Russia to use the mainstream international fleet for the transportation of its crude as Urals is unlikely to trade below such a low-price cap.
“Earlier, whenever Urals tend to trade below the price cap (especially in the low price environment), the mainstream fleet, especially from Greek owners, used to carry the Russian cargo. However, for selling Urals above the new price cap, Russia will need to expand the parallel fleet (normally called dark/grey fleet),” he added.
EU, US sanctions
Verma pointed out that while the sanctions by the US and EU reflect a stepped-up effort to curb Iranian and Russian oil revenues, there appears to be limited alignment in their strategies.
“The EU remains focused on constraining Russia’s energy income, whereas the US is pursuing broader geopolitical objectives, including trade leverage and renewed diplomatic engagement with Iran,” he added.
Previous rounds of sanctions on Russian, Iranian, and Venezuelan crude have led to the emergence of a parallel market for transporting sanctioned oil, Verma pointed out.
Despite an expanding list of sanctioned vessels and the G7 price cap mechanism, Russian crude continues to reach select buyers. Likewise, Iranian oil has steadily flowed to Asian markets, even with US sanctions in place since 2019.
“Going forward, it will be important to observe how the latest wave of sanctions on Russian and Iranian oil influences the dynamics of the tanker market,” Verma anticipated.
More Like This
Published on August 3, 2025
