Russian oil piles up off China’s coast

Five tankers carrying 3.4 million barrels of Russian oil are drifting in the Yellow Sea off China’s coast, Bloomberg reported, citing data from analytics firm Kpler.

The volume is the highest in at least five years and is double the level seen a week earlier. The vessels are located near China’s Shandong province, home to many private refineries that have traditionally been more willing to buy sanctioned crude.

The unusual aspect is that the tankers are loaded with Urals, Russia’s main export grade that is typically shipped to India. Chinese refineries, which are more accustomed to Far East crude grades, may face difficulties unloading and processing the oil.

The redirection of Urals to China follows a sharp drop in demand from India after U.S. sanctions were imposed on major Russian exporters. Indian government data show Russian crude imports are set to fall to about 800,000 barrels per day in December, down from around 2 million bpd in June.