At Any Rate Global Commodities: Oil glut paves way for stronger sanctions. If enforced
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Oct 24, 2025 The podcast dives into the impact of U.S. sanctions on major Russian oil producers like Rosneft and Lukoil, with nearly 70% of crude production affected. Discussion highlights Russia's creative circumvention strategies, leveraging offshore traders to maintain exports. The host also examines how India's imports may decline significantly, while China might stabilize its flows. Rising logistics costs loom due to shipping restrictions, and prospects suggest a temporary pause in exports followed by normalization and tighter profit margins.
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Sanctions Now Hit Major Russian Producers
- Sanctions now target Russia's biggest oil producers, including Rosneft and Lukoil, covering nearly half of production and exports.
- Together with earlier measures, about 70% of Russia's 2024 production and exports are under U.S. curbs.
Dollar Exclusion Raises Costs Despite Few Dollar Sales
- Only 5% of Russian oil exports are settled in US dollars now, down from 55% in 2022, shifting payments to yuan, rupee, and ruble.
- But logistics, freight, and insurance remain dollar-linked, raising costs and slowing exports without dollar clearing.
Limit Direct Exposure To SDN-Listed Firms
- Avoid direct dealings that name SDN-listed companies because secondary sanctions and reputational risk could follow.
- Use offshore traders and newly formed entities to manage documentation while limiting direct legal links.