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India’s state-owned Oil and Natural Gas Corporation (ONGC) is having difficulty finding a vessel for the transportation of crude oil from Russia, as Western sanctions on Russia for its offensive against Ukraine continue to mount, reported Reuters.
The company is facing problems in shipping 700,000 barrels of crude oil from Russia’s Far East, according to the news agency’s sources.
According to the sources, sanctions are creating hurdles for one of Moscow’s largest partners in the shipment of crude oil.
Various Indian companies, including ONGC, own interests in oil and gas assets in Russia.
The news agency reported that India has been purchasing more crude oil from Russia after it launched its military attack on Ukraine.
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ONGC owns a 20% interest in the Sakhalin 1 project, which generates a Russian grade called Sokol that is mostly purchased by North Asian buyers and loaded from South Korea. ONGC exports Sokol through tenders.
Using ice-class vessels, Sokol oil cargoes are initially transported to South Korea from the De-Kastri terminal located in Russia’s Far East.
ONGC depends on ice-class vessels supplied by Russian state-owned Sovcomflot (SCF) for the shipment of crude oil to Yoesu port in South Korea. Later, it is exported to buyers by ONGC.
However, due to the sanctions imposed on Russia by the US, UK, European Union and Canada, getting insurance and reinsurance cover for voyages by Russian ships is becoming tough, according to the shipping sources.
Shipping sources also revealed that shipping companies are not showing interest in transporting Russian oil to Asian countries due to the reputational risks related to the charters.
Last month, ONGC failed to secure any bids in its tender to export Sokol, as a result of sanctions imposed by Western nations.