(Bloomberg) -- Russia’s crude shipments rebounded to the most in three months last week on the resumption of normal flows from the country’s main Pacific terminal at Kozmino and a second week of elevated exports from Primorsk on the Baltic.
Weekly cargoes rose by about 850,000 barrels a day, to the highest since the end of June. Four-week average crude volumes, which are less volatile, climbed to 3.26 million barrels a day in the week to Sept. 29, up by 160,000 from the previous period.
Shipments from Kozmino on the country’s Pacific coast bounced back after the previous week’s slump, which was likely related to maintenance work, with 10 tankers completing loading during the latest week. Flows out of Primorsk remained close to historical highs after jumping the previous week.
The increase in shipments was partly offset by another drop in weekly average prices for Russia’s crude shipped from western ports, which fell by more than $1 a barrel. Prices for Kozmino-loading ESPO moved in the opposite direction, flipping to a rare premium to Brent futures.
In the face of sanctions and continuing attacks on shipping in the southern Red Sea, Russia has boosted crude shipments to China via its Northern Sea Route across the Arctic. By mid-September, the amount of crude passing through the environmentally sensitive area had already exceeded last year’s total, with a month to go before the waters get too icy and perilous for transit.
Russia’s average oil-processing levels for the first 25 days of September fell to 5.28 million barrels a day, the lowest since June, amid seasonal maintenance at the nation’s refineries.
Crude Shipments
A total of 35 tankers loaded 26.17 million barrels of Russian crude in the week to Sept. 29, vessel-tracking data and port-agent reports show. The volume was up from 20.23 million barrels on 27 ships the previous week.
It means Russia’s seaborne daily crude flows in the week to Sept. 29 jumped by about 850,000 barrels to 3.74 million. That’s the highest since the last week of June.
The less volatile four-week average also rose, increasing by 160,000 barrels a day to 3.26 million from 3.1 million the previous week.
Crude shipments so far this year are about 50,000 barrels a day below the average for the whole of 2023.
One cargo of Kazakhstan’s KEBCO crude was 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 November, after a planned easing of some output cuts was delayed by two months.
Moscow has 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.
Russian data show the nation got very close to meeting its OPEC+ crude-output target in August, following a push from the group to improve adherence to its supply deal.
Export Value
The gross value of Russia’s crude exports rose to $1.68 billion in the seven days to Sept. 29, from $1.29 billion in the period to Sept. 22. The increase in weekly flows was partly offset by a drop in weekly-average prices for Russia’s major crude streams.
Export values at Baltic ports were down week-on-week by about $1.20 a barrel, while shipments from the Black Sea fell by about $1.40 a barrel. In contrast, prices for key Pacific grade ESPO rose by about $1 compared with the previous week. Delivered prices in India dropped, falling by about $1.20 a barrel, all according to numbers from Argus Media.
Four-week average income recovered slightly, rising to about $1.43 billion a week, from $1.42 billion in the period to Sept. 22. The four-week average peak of $2.17 billion a week was reached in the period to June 19, 2022.
During the first four weeks after the Group of Seven nations’ price cap on Russian crude exports came into effect in early December 2022, the value of seaborne flows fell to a low of $930 million a week, but soon recovered.
Flows by Destination
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Asia
Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to 3.11 million barrels a day in the four weeks to Sept. 29. That’s about 4% below the average level seen during the recent peak in April.
About 1.37 million barrels a day of crude was 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 1.5 million barrels a day, down from a revised 1.57 million for the period to Sept. 22.
Both the Chinese and Indian figures are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations.
The equivalent of about 180,000 barrels a day was on vessels signaling Port Said or Suez in Egypt. Those voyages typically end at ports in India or China and show up as “Unknown Asia” until a final destination becomes apparent.
The “Other Unknown” volumes, running at about 50,000 barrels a day in the four weeks to Sept. 29, 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.
Greece has extended naval exercises until November in an area that’s become associated with the transfer of Russian crude. These naval drills haven’t entirely halted ship-to-ship transfers of Russian crude in the area, though. The supertanker Alma recently received crude from two smaller tankers, Sagar Violet and Arlan, in a narrow channel located between two areas that have been closed to shipping.
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Europe and Turkey
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, with flows in the 28 days to Sept. 29 steady at about 160,000 barrels a day for a third week. Prior to the recent period, that’s the least since March 2023.
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, Oct. 8.
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.
--With assistance from Sherry Su.
©2024 Bloomberg L.P.
