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Russia’s Seaborne Crude Exports Fall by the Most Since July
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Russia’s Seaborne Crude Exports Fall by the Most Since July
Julian Lee
7 min read
(Bloomberg) -- Russia’s seaborne crude exports saw their biggest drop since July, with shipments sliding to a two-month low, as flows to key buyer India fell sharply.
Four-week average volumes declined by about 150,000 barrels a day in the period to Nov. 24, slipping for the fourth time in five weeks, even as weekly exports were up slightly from the previous seven days.
The drop in shipments was concentrated in Russia’s western ports, where flows in the past two weeks are down by about 25% from their average level last month. In the latest week, a five-day gap in the loading program for Novorossiysk, likely maintenance-related, hit cargoes from the Black Sea.
With the majority of cargoes from export terminals in the west destined for India, the drop in four-week average shipments from the Baltic, Arctic and Black Sea was reflected in a reduced amount of crude heading to the South Asian nation. Initial flows in the period to Nov. 24 were below 1 million barrels a day. Though that will rise as discharge ports become clear, it will still be at least 500,000 barrels a day down on the amount shipped in the four weeks to mid-October.
The overall reduction comes ahead of discussions among OPEC+ oil ministers on Sunday amid expectations that they will delay for a third time their plan to start adding barrels back into the market. Russia pledged to make deeper output cuts in October and November to make up for past over-production and the lower exports may, in part, reflect efforts to meet that promise. Output last month was close to Russia’s OPEC+ target, according to government data.
Separately, the UK has added two more Russian insurance companies, AlfaStrakhovanie Group Plc and VSK, to its list of sanctioned entities, where they join three fellow insurers. Four of the companies are currently approved by the government of India to provide P&I insurance to vessels calling at the country’s ports. The authorities in London have also added another 30 tankers to a list of vessels sanctioned for carrying Russian oil. Fourteen of them were already sanctioned by either the US or the European Union.
Crude Shipments
A total of 27 tankers loaded 20.5 million barrels of Russian crude in the week to Nov. 24, vessel-tracking data and port-agent reports show. The volume was up modestly from 19.8 million barrels on 26 ships the previous week.
Daily crude flows in the week to Nov. 24 rose by about 100,000 barrels to 2.93 million. The increase was driven by higher flows from the country’s Arctic ports, while shipments from the Pacific remained unchanged.
Less volatile four-week average flows moved in the opposite direction, dropping by the most since mid-July to average 3.12 million barrels a day, with a decrease of 150,000 from the period to Nov. 17.
Crude shipments so far this year are about 60,000 barrels a day, or 1.7%, below the average for the whole of 2023.
Two cargoes of Kazakhstan’s KEBCO crude were loaded at Novorossiysk on the Black Sea and one at Ust-Luga on the Baltic during the week.
Russia terminated its export targets at the end of May, opting instead to restrict production, in line with its partners in the OPEC+ oil producers’ group. The country’s output target is set at 8.978 million barrels a day until the end of December, after a planned easing of some output cuts was delayed for a second time.
Moscow also pledged to make deeper output cuts in October and November this year, then between March and September of 2025, to compensate for pumping above its OPEC+ quota earlier this year.
Export Value
The Kremlin’s oil income rose with an increase in weekly-average prices for Russia’s major crude streams adding to the effect of the small uptick in the weekly export volume. Together they pushed the gross value of Moscow’s exports up by about $75 million to $1.33 billion in the week to Nov. 24.
Export values at Baltic ports were up week-on-week by about $2.30 a barrel. Prices for Black Sea loading Urals rose by about $2.10 a barrel and key Pacific grade ESPO increased by about $0.90, compared with the previous week. Delivered prices in India were up by about $2 a barrel, all according to numbers from Argus Media.
Four-week average income moved in the opposite direction, dropping to about $1.4 billion a week, from $1.47 billion in the period to Nov. 17.
On this basis, the price of Russia’s shipments from the Baltic in the four weeks to Nov. 24 was down by about $0.10 a barrel from the period to Nov. 17. Prices for key Pacific grade ESPO were lower by about $0.20 a barrel. In contrast, prices for Black Sea shipments rose marginally, as did the delivered price for shipments to India.
Observed shipments to Russia’s Asian customers, including those showing no final destination, fell to 2.76 million barrels a day in the four weeks to Nov. 24.
About 1.43 million barrels a day of crude were loaded onto tankers heading to China. The Asian nation’s seaborne imports are boosted by about 800,000 barrels a day of crude delivered from Russia by pipeline, either directly, or via Kazakhstan.
Flows on ships signaling destinations in India averaged 960,000 barrels a day, down from a revised 1.29 million for the period to Nov. 17 and 1.39 million in the four weeks to Nov. 10.
The Indian figures, in particular, are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations. Most of those heading from Russia’s western ports through the Suez Canal end up in the south Asian nation.
The equivalent of about 270,000 barrels a day was on vessels signaling Port Said or Suez in Egypt. Those show up as “Unknown Asia” until a final destination becomes apparent.
The “Other Unknown” volumes, running at about 100,000 barrels a day in the four weeks to Nov. 24, are those on tankers showing no clear destination. Most originate from Russia’s western ports and go on to transit the Suez Canal, but some could end up in Turkey. Others may be moved from one vessel to another.
Greek naval exercises that have been running since May and have forced ship-to-ship cargo transfers out of the Laconian Gulf and nearby waters, were extended for a sixth time and will now continue until mid-March. Russia has found a new location close to Greek shores to carry out cargo switches, though this has so far been limited to refined products.
Russia’s seaborne crude exports to European countries have ceased, with flows to Bulgaria halted at the end of last year. Moscow also lost about 500,000 barrels a day of pipeline exports to Poland and Germany at the start of 2023, when those countries stopped purchases.
Turkey is now the only short-haul market for shipments from Russia’s western ports. Flows in the 28 days to Nov. 24 rebounded to about 370,000 barrels a day, equaling the three-month high they’d set in the period to Nov. 10.
NOTES
This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. The next update will be on Tuesday, Dec. 3.
All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and Ust-Luga and are not subject to European Union sanctions or a price cap. The Kazakh barrels are blended with crude of Russian origin to create a uniform export stream. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies.
Vessel-tracking data are cross-checked against port agent reports as well as flows and ship movements reported by other information providers including Kpler and Vortexa Ltd.
If you are reading this story on the Bloomberg terminal, click for a link to a PDF file of four-week average flows from Russia to key destinations.
