- Chinese buyers are shuttling ships to tankers at sea to get cheap oil from Russia, per Bloomberg.
- Chinese buyers are using risky ship-to-ship transfers as more ship owners shun Russian oil, it said.
- The availability of oil tankers has dropped because of sanctions against Russia, Bloomberg added.
China is sending small vessels out to huge tankers at sea in an effort to transport cheap Russian oil to Asia, Bloomberg reported.
Following the sanctions imposed over Russia's invasion of Ukraine, more shipowners and insurers are refusing to handle Russian oil, leading to Chinese buyers using risky ship-to-ship transfers to keep crude coming into the country, shipbrokers told Bloomberg.
Shipbrokers told the outlet that at least one Chinese buyer is shuttling smaller vessels between the port of Kozmino in Russia and the coastline of Yeosu in South Korea. From there, the oil is transferred onto a massive oil tanker, which then makes its way to China, they said.
Bloomberg cited an example from ship-tracking data which showed two of China's Cosco Shipping Holdings smaller tankers, Yang Li Hu and Yang Mei Hu, stocking up with Russian oil ESPO in mid-May in Kozmino port and sailing to Yeosu to transfer the cargo onto the Yuan Qiu Hu tanker, which then traveled to China three-quarters full of crude.
It's unusual for Russian ESPO oil to be transported in this way. Normally, it's ferried directly to the buyer in China via small tankers, Bloomberg reported.
The availability of oil tankers has dropped because of the financial sanctions against Russia, per Bloomberg. The ship-to-ship transfers allow the oil producers and buyers to deploy their fleet of vessels in a more effective manner, the shipbrokers told Bloomberg. However, it's not being done to avoid sanctions, they reportedly added.
Shipbrokers told Bloomberg that the process takes longer for the oil to reach the buyer and costs more.
The news comes as China has ramped up purchases of discounted Russian oil, which the West has shunned, Reuters reported. Data from Vortexa Analytics, which was cited by Reuters, said that China is set to import 1.1 million barrels per day of Russian oil brought by sea.