India’s ONGC struggling to move Russian oil to Asia as sanctions bite – sources

India’s ONGC struggling to move Russian oil to Asia as sanctions bite – sources

ONGC has a 20% stake in the Sakhalin 1 project that produces a Russian grade known as Sokol, which ONGC exports through tenders. Sokol is mostly bought by North Asian buyers and loaded from South Korea.

However, Moscow's ability to ship that grade, which requires vessels that can break through ice, is becoming harder due to concerns from shippers over reputational risk and the increasing difficulty for Russian assets to find insurance coverage.

Normally, cargoes of Sokol oil are first shipped from the De-Kastri terminal in Russia's Far East using ice class vessels to South Korea, where they are then reloaded onto a conventional tanker.

Indian refiners rarely buy the Sokol grade, as difficult logistics make the crude costly. There are a limited number of ice class vessels in the global merchant fleet that can be deployed at any time.

ONGC relies on ice-class vessels provided by Russia's state-owned Sovcomflot (SCF) for the transportation of crude to Yoesu port in South Korea, and from there the Indian company exports to buyers, mostly in North Asia.

However, sanctions imposed on Russia by the United States, Britain, the European Union and Canada after Moscow's invasion of Ukraine, in addition to specific restrictions on SCF, are making it