October 22 marked a turning point for Russia's oil exports. US President Donald Trump imposed severe sanctions on Russia’s energy sector, especially major companies Rosneft and Lukoil, which collectively supply about half of the country's oil. Rosneft alone generates approximately 17% of the Kremlin’s budget revenues.
As a result, Russian seaborne oil exports plunged to a ten-month low in the first week of November, with export volumes dropping by more than 20%. Key importers—China, India, and Turkey—significantly reduced their purchases. China’s state oil giants have suspended importing Russian seaborne oil, while private refiners have also cut back.
India’s leading private company, Reliance Industries, pledged to comply with US sanctions and switched to alternative suppliers. The state-run Indian Oil Corporation temporarily halted orders and started tenders for oil from the Middle East, the US, and Latin American countries. Turkey has also shown reduced imports.
Meanwhile, a record amount of unsold Russian oil—over 380 million barrels—is stored at sea, as tankers increasingly serve as floating storage facilities. Transportation costs for Russian oil have surged, and the price for major Russian grades, notably the ESPO blend, has sharply declined due to waning demand.
Despite these developments, global oil prices have remained relatively stable thanks to increased supplies from Saudi Arabia, the UAE, Iraq, Qatar, and the US. The US sanctions are opening new market opportunities for alternative suppliers and putting additional financial strain on Russian oil companies. While a full stop of Russian exports is unlikely, the losses to Russia’s budget are mounting.
For Ukraine, this is a positive sign of strengthening Western sanctions pressure on the Kremlin.
