Tightened U.S. sanctions on Moscow have disrupted a roaring trade in discounted Russian oil to China and India, reviving demand for Middle Eastern and African crudes, roiling shipping markets and driving up oil prices.

Crude futures settled off the day's lows, helped by a modestly positive report from the International Energy Agency that raised its global oil demand growth forecast for this year.

Purchase of Russian oil by India refiners have been hit after Washington's sanctions last month targeting Russia's oil supply chain, which caused tanker freight rates to soar as some buyers and ports in China and India avoided sanctioned ships. Indian companies take delivery of oil at their import destination, not at the port of export, Jain said.

Tightened U.S. sanctions on Moscow have disrupted a roaring trade in discounted Russian oil to China and India, reviving demand for Middle Eastern and African crudes, roiling shipping markets and driving up oil prices.

The latest US sanctions against Russia’s oil sector have led to the suspension of most Russian tankers. Source: Bloomberg Details: Currently, 94 out of 154 tankers sanctioned under the Biden administration have stopped transporting Russian oil.

For Russian oil, tougher sanctions imposed a month ago by the outgoing Biden administration have driven up costs for refiners in China and India, with March ESPO Blend crude traded at $2 to $3 above ICE Brent on a DES basis to China, the highest premiums in more than two years, three trade sources said.