At least 20 tankers carrying more than 14 million barrels of Russian oil are sailing toward the United States despite a growing chorus to ban imports from the warring nation.
The fuel was already purchased by American suppliers, so the product will arrive here and get offloaded unless sanctions are implemented in the interim. It has a market value of $1.5 billion, said Matt Smith, lead oil analyst at Kpler, a data and analytic firm.
“If the U.S. decides to close its ports, the companies that own the cargoes on the tankers will likely have to sell them to someone who can receive them,” Smith said. “Britain has already been turning some cargoes of liquefied natural gas away.”
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This week, Britain banned Russian-owned or chartered ships from docking, while Canada announced the ban of oil imports, among other sanctions. The European Union is considering a ship ban.
Currently, three tankers have anchored in U.S. waters: Honolulu, which is offloading today; Delaware Bay, close to President Joe Biden’s beachfront home; and Houston. Half a million barrels are imported by the U.S. per day from Russia, which is 7% of its total.
“A ban on Russian crude and product imports would have a limited impact on prices, given flows of Russian energy to the U.S. are small in terms of total deliveries and alternative sources could be found,” Smith said. “A number of the current imports are opportunistic purchases, rather than regular deliveries.”
The Ukraine invasion has created a domino effect in the oil industry, with all parties in the transport chain having a “distinct lack of appetite” to touch Russian crude, Smith said.
“Shippers are not willing to move it, tankers are not willing to carry it, countries and companies are not wanting to take delivery of it, and insurance companies are not willing to insure it,” he said.
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So far, President Joe Biden has resisted the fuel ban saying it would send already high prices soaring. In an unusual move, House Speaker Nancy Pelosi publicly countered the president on Thursday, saying she backed a Russian oil ban.
