The falling price of oil is driving a clear shift away from Russian oil trades, according to broker Lorentzen & Co.

Russia became China’s top crude supplier in January and February after Moscow was forced to divert oil intended for the European Union following the bloc’s ban on imports.

But the falling oil price sparked by concerns of a new banking crisis has seen a switch to longer-haul trades into Asia from the US Gulf and Brazil, said chief shipping analyst Nicolai Hansteen.

“Let there be no doubt: What’s happening in the oil market… is good for tankers,” he said in a daily update.

“If turmoil in the financial market should work towards demand destruction in the West, that should only make more oil available for exports eastbound.”

Some 25 VLCCs were fixed on subjects or confirmed last week at rates of up to $167,000 a day, with at least 10 of them to China, according to data from Tankers International.

Over the past year, India and China have snapped up discounted Russian crude but increasing volumes on the water suggest that the two countries might be looking for alternative sources, according to the International Energy Agency.

Buyers have turned to the US Gulf for cheaper barrels compared with Middle East grades, which has driven up demand for tonnage, said French shipbroker BRS Group. US oil supply is expected to rise to a record high of 12.5m barrels a day in 2023, according to the IEA.

BRS said China was likely to take advantage of the sell-off in oil prices over the past week. Brent crude was trading just below $75 a barrel on Tuesday, down from a high of more than $120 in June.

“The market is caught in the cross-currents of supply outstripping still-lacklustre demand, with stocks building to levels not seen in 18 months,” said the IEA report for March.