The amount of Russian and Iranian oil held on ships has hit multi-month highs as harsher U.S. sanctions reduced the number of buyers, leaving fewer tankers available to deliver cargoes and driving up crude costs,

The latest US sanctions against Russia’s oil sector have led to the suspension of most Russian tankers. Source: Bloomberg Details: Currently, 94 out of 154 tankers sanctioned under the Biden administration have stopped transporting Russian oil.

With a limited supply of sanctions-proof cargoes, discounts for Russian Urals crude to dated Brent have narrowed to $2.50-$2.90 a barrel for March delivery, versus $3-$3.50 before the January sanctions, they said, a major cost increase on a typical one million barrel cargo.

The Biden Administration’s farewell sanctions on Russian oil trade were the most aggressive yet and sanctioned dozens of vessels that Russia used to ship the ESPO crude blend from Kozmino to China’s independent refiners.

Russia is facing the threat of a reduction in oil production due to US sanctions and Ukrainian drone attacks. Source: Reuters Details: Reuters noted that the US sanctions have complicated access to tankers supplying oil to Asia,

The sanctions, which targeted Gazprom Neft, Surgutneftegaz, and 180 shadow fleet tankers, have created a surplus of oil in Russia that cannot be exported abroad. The ports of Ust-Luga, Primorsk on the Baltic and Novorossiysk on the Black Sea have seen a 17% drop in January export deliveries,