In early January 2025, the United States and the United Kingdom imposed extensive sanctions targeting Russia’s oil export infrastructure, focusing on its “shadow fleet”—a network of vessels facilitating the clandestine transport of Russian oil to circumvent existing sanctions.
The U.S. Treasury sanctioned over 180 vessels and associated entities, including major Russian oil producers. These measures have led to significant disruptions in Russia’s oil supply chains:
- Stranded Shipments: Nearly 500,000 metric tons of Russian oil products are currently stranded at sea, unable to find buyers or ports willing to accept them due to the sanctions.
- Market Impact: Oil prices experienced a temporary spike, with Brent crude futures reaching $82.55 per barrel, the highest since August of the previous year.
- Shipping Costs: Tanker freight rates have surged, with the cost for a supertanker on the Middle East to China route increasing by 15% to $4.1 million.
- Despite the US replenishing it Strategic Petroleum Reserves, the current SPR level remains significantly below its historical peak of over 700 million barrels.
All these factors are driving up fuel prices at the pump, this is expected to continue for the short term.