Russian companies producing oil in the Arctic, where about a quarter of all proven reserves of "black gold" in the country are concentrated, have faced serious problems due to new US sanctions, Reuters reports, citing sources familiar with the situation in the industry.

According to the agency's interlocutors, Gazprom Neft, which pumps barrels from the Novoportovskoye field and the Prirazlomnaya offshore platform, as well as Lukoil, which is developing the Timan-Pechora fields, may be forced to begin suspending production within a few weeks due to the inability to transport oil to buyers.

At least 15 tankers involved in the transportation of Russian Arctic oil, as well as two floating storage facilities - Umba and Kola, which were used to transship raw materials from shuttle tankers to larger Aframax or Suezmax class vessels, were hit by the new round of oil sanctions, one of the largest since the beginning of the war. "There are no options to quickly replace (the tankers that have been sanctioned)," one of Reuters' sources says. "Nothing like this can be bought anywhere. The vessels were specially built for these projects."

According to the agency's sources, millions of barrels of unsold oil could accumulate in storage facilities, the volume of which is extremely limited. At the same time, it is de facto impossible to send the oil to Russian refineries: it was originally intended for export, and there is simply no infrastructure for pumping it into the Russian pipeline system.

According to Reuters' sources, all three grades of Arctic oil could face problems: Novy Port from Gazprom Neft's Novoportovskoye field, where temperatures can reach -55 degrees Celsius, ARCO from the Prirazlomnaya offshore platform, and Varandey from Lukoil's Timan-Pechora fields.

This is light oil with a low sulfur content, which was actively purchased by refineries in northwestern Europe until 2022, and after the start of the war and Western sanctions, India and China began to buy it. At the same time, due to its premium quality, it has always traded above the price ceiling of the G7 countries ($60 per barrel).

The total production volume of Arctic grades is 300 thousand barrels per day, or about 10% of all seaborne oil exports from the Russian Federation. India and China have already made it clear that they are not ready to accept oil from sanctioned tankers, and have begun to look for a replacement for Russian supplies: Indian refineries are considering the possibility of purchasing WTI grades from the United States, a source in one of the Indian oil refineries told Reuters.

In total, the Biden administration's "farewell oil sanctions" could hurt Russian oil exports by 800,000 barrels per day, or 15% of all oil exports (including sea and pipeline), Alfa Bank analysts previously estimated. "In the worst-case scenario, Russia could lose $25 billion in export revenue" annually, warns Finam analyst Maxim Pukhov.