13 January 2026

Russian oil companies continue to experience difficulties selling barrels to India and China, forcing them to stockpile unsold crude on tankers converted into floating storage facilities.

Since late November, when the US imposed sanctions on Rosneft and Lukoil and Indian and Chinese refineries began refusing cargoes, 35 million barrels of Russian oil have been stuck on tankers at sea, according to  Bloomberg calculations . 

The total volume of Russian oil stored in tankers has reached a record 216 million barrels. At least 12 vessels loaded with Urals crude have been anchored off the coast of Oman since mid-December, awaiting buyers. New tankers carrying Russian oil are arriving in the area and dropping anchor almost daily, according to Bloomberg.

India, the main buyer of seaborne cargoes of Urals, cut its imports to a three-year low in December: 1.1 million barrels per day, down from 1.7 million in November. Unable to sell oil, Russian oil companies have begun cutting production , despite the OPEC+ quota allowing for an increase. In December, Russia pumped 9.326 million barrels per day—100,000 fewer than in November and 250,000 below the level permitted under the OPEC+ deal.

Russian oil producers are apparently running out of storage capacity, while sanctions against Rosneft and Lukoil are creating problems for exports, notes Janis Kluge, an expert at the German Institute for International Security Studies.

Russia is already trying to create a new network to circumvent sanctions—intermediary companies from which Indian refineries will purchase crude, notes Homayoun Falakshahi, head of oil market analysis at Kpler. He believes that supply volumes to India will likely recover: discounts reaching almost $30 per barrel make Russian oil attractive and allow for savings of up to $4 billion per year.

The average price of Urals crude in December fell below $40 per barrel for the first time in five years. This threatens Russia with a loss of both export and budget revenues, warns economist Dmitry Polevoy.

According to his estimates, oil and gas export revenues could decline by $30-35 billion this year, to $185-190 billion, due to discounts on Urals. And budget oil and gas revenues could fall short of the planned 1.1-1.4 trillion rubles. As a result, the treasury deficit could widen from the planned 1.6% of GDP to 2.7% of GDP, Polevoy estimates, and the government will have to reopen the National Welfare Fund, which has approximately $50 billion in liquid assets remaining—2.5 times less than before the war.

In rubles, the National Welfare Fund’s liquid assets are estimated at 4.1 trillion. This amount would be enough to cover 1.5-2 years of unfavorable oil prices, Polevoy believes.