How Russia Avoids Oil Sanctions: Transfer-At-Sea To “Destination Unknown”

By Tyler Durden,

Authored by Mike Shedlock via,

Russian oil still flows under the radar. It goes to “destination unknown”…

Average daily crude exports from Tanker Tracker via WSJ

Under the Radar

Please consider Russian Oil Flows, but Increasingly Under the Radar.

Oil exports from Russian ports bound for European Union member states, which historically have been the biggest buyers of Russian crude, have risen to an average of 1.6 million barrels a day so far in April, according to Exports had dropped to 1.3 million a day in March following the Ukraine invasion. Similar data from Kpler, another commodities data provider, showed flows rose to 1.3 million a day in April from 1 million in mid-March.

Oil from Russian ports is increasingly being shipped with its destination unknown. In April so far, over 11.1 million barrels were loaded into tankers without a planned route, more than to any country, according to That is up from almost none before the invasion.

The use of the destination unknown label is a sign that the oil is being taken to larger ships at sea and unloaded, analysts and traders said. Russian crude is then mixed with the ship’s cargo, blurring where it came from. This is an old practice that has enabled exports from sanctioned countries such as Iran and Venezuela.

Appearances vs Reality

This is yet another look at how sanctions don’t work. The oil gest through, but the added costs drive up the costs.

Since oil is fungible, the added costs are on everyone, not just Russia.

The U.S., U.K., Canada and Australia have banned imports of Russian oil, but it would not be the least bit surprising if via mixing at sea some of that got through to the US.

The EU says these shipments are necessary because of long-term contracts. OK, then why the mixing at sea to destinations unknown?

The obvious answer is countries want to appear as if they are sanctioning Russian oil, but in practice cannot afford to cut off supply.

It’s easy for the US to say it will take no Russian oil or gas when it takes little of the former and none of the latter.

The EU would have to sanction ships, not just Russia. But then how does it get oil?

Yellen Yap 

Modest Proposal

I have a modest proposal: End the sanctions.

It’s clear the oil is getting through anyway, allegedly headed to nowhere. Meanwhile, the disruptions are driving up inflation everywhere.

The EU wants to appear it’s doing something, but that cost of that appearance at the expense of reality is higher inflation for everyone.

By ending the sanctions, the cost of all these supply chain shenanigans will go away.

Bipolar System

Treasury Secretary Yellen is worried about Russia avoiding sanctions via China, India, etc

The irony in this madness is the US is concerned about China and India breaking US sanctions when the EU transacts with Russia, hidden in plain sight.

For discussion, please see Janet Yellen Warns China on Russia and Creating a Bipolar Global Financial System

Using Ethereum and Bitcoin, Not the Yuan, to Avoid US Sanctions on Russia

Numerous countries have established ways of avoiding the US dictating sanction policy for the world.

In case you missed it please consider Using Ethereum and Bitcoin, Not the Yuan, to Avoid US Sanctions on Russia.

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