The crude oil market is adapting quickly to the new sanctions against Russia's shadow fleet of tankers, albeit by creating both short- and medium-term winners and losers.

Millions of barrels of oil that would normally be preserve of oil refineries in Europe are instead heading to Asia as US sanctions on Russia revive one of the market’s great arbitrage trades.

Russia has continued to send cargoes of crude oil to India on tankers that have been sanctioned by the US, Bloomberg reported on Tuesday.

In China, newly sanctioned tankers face delays offloading oil despite meeting waiver requirements. Three of them discharged Russian ESPO and Sokol crude during Jan. 15-17 while tanker Olia offloaded at Shandong's Yantai port on Sunday after carrying its ESPO cargo for nearly three weeks, according to LSEG data.

On Jan. 10 the US Treasury’s Office of Foreign Assets Control sanctioned 161 tankers and traders involved in about 2,000 shipments since the invasion began. It also acted against Moscow-based ship insurers and two companies — Surgutneftgas and Gazpromneft — which in the first 10 months of last year accounted for almost 30% of Russia’s oil exports.

Trade for March-loading Russian oil in China and India has stalled due to soaring shipping costs triggered by U.S. sanctions introduced on Jan. 10, Reuters reported on Jan. 28. The sanctions target nearly 200 vessels in Russia's "shadow fleet,

In China, there is a lack of interest in March deliveries of oil from Russia following the imposition of new American sanctions on the Russian "shadow fleet", which have led to increased tanker transport costs not covered by these sanctions,