(Bloomberg) -- Russia’s seaborne crude exports rose for a second consecutive week to reach the highest in a month.
Flows increased by 120,000 barrels a day, after adding a similar amount the previous week, with major ports on the Baltic and Pacific coasts operating near peak levels.
In contrast, four-week average cargoes slipped by 50,000 barrels a day to 3.41 million in the period to Oct. 27, the first decline in five weeks. The drop reflected a spike in exports seen in the week to Sept. 29 falling out of the calculation. But shipments on this basis remained above the 3.4 million marker, a level exceeded only four times since mid-May.
Russia’s refining remains on course for a slump to the lowest since May 2022, leaving more crude available for export. Planned seasonal maintenance has cut runs, which may also be affected by lower margins that make processing at some facilities in southern Russia less attractive.
The increase in flows was boosted by small increases in the price of Russian crude, which helped lift the gross value of Moscow’s exports by about $50 million to $1.6 billion in the week to Oct. 27.
Sanctions against tankers hauling Russian oil have become less effective in recent months, despite a growing number of ships being targeted. The list of tankers named for involvement in Moscow’s oil trade has risen to 90. But at least 16 shipments so far in October have been carried by sanctioned vessels, with half of those making the short trip between Russia’s Pacific export terminals and Chinese ports.
Crude Shipments
A total of 32 tankers loaded 24.79 million barrels of Russian crude in the week to Oct. 27, vessel-tracking data and port-agent reports show. The volume was up from a revised 23.93 million barrels on 32 ships the previous week.
Despite the increase in weekly shipments, four-week average flows fell to 3.41 million barrels a day, down by 50,000 from the previous week.
Russia’s more volatile daily crude flows in the week to Oct. 27 rose by about 120,000 barrels to 3.54 million, driven by an increase in flows from the country’s Black Sea and Arctic ports, which more than offset lower shipments from the Pacific.
Crude shipments so far this year are about 40,000 barrels a day, or 1.3%, below the average for the whole of 2023.
One cargo of Kazakhstan’s KEBCO crude was loaded at Ust-Luga on the Baltic Sea and one at Novorossiysk on the Black Sea 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.
Export Value
Four-week average income slipped to about $1.57 billion a week, from $1.59 billion in the period to Oct. 20.
On this basis, the price of Russia’s shipments from the Baltic and Black Sea in the four weeks to Oct. 27 was up by about $0.20 a barrel from the period to Oct. 20. Prices for key Pacific grade ESPO were higher by about $0.40 a barrel.
In the seven days to Oct. 27, the value of Russia’s crude exports increased to $1.6 billion from a revised $1.55 billion in the period to Oct. 20. Income rose with a jump in weekly-average prices for Russia’s major crude streams adding to the effect of the higher export volume. The price increase was in line with broader gains for oil amid fears that Jerusalem would target Iran’s oil infrastructure in retaliation for the missile barrage that the Persian Gulf nation launched against Israel at the start of the month.
Those fears largely evaporated after the Israeli response at the weekend focused on Iran’s air defenses and other military targets, triggering a broad sell-off in oil when markets re-opened.
Export values at Baltic and Black Sea ports were up week-on-week by about $0.70 a barrel. Prices for key Pacific grade ESPO moved in the opposite direction, edging lower by about $0.10 compared with the previous week. Delivered prices in India increased, rising by about $0.60 a barrel, all according to numbers from Argus Media.
Flows by Destination
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Asia
Observed shipments to Russia’s Asian customers, including those showing no final destination, edged lower to 3.12 million barrels a day in the four weeks to Oct. 27. That’s about 4% below the average level seen during the recent peak in April.
About 1.24 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 1.55 million barrels a day, down from a revised 1.68 million for the period to Oct. 20.
The Indian figures, in particular, are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations. All of those are heading from Russia’s western ports toward the Suez Canal, with most of the cargoes that head through the waterway ending up in the south Asian nation.
The equivalent of about 140,000 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 190,000 barrels a day in the four weeks to Oct. 27, 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.
Two Aframax tankers, Neon and Lefkada, transferred their cargoes into the Turbo Voyager and the Marathon off Egypt’s Port Said in the past two weeks. Two more are signaling their destinations as OPL Morocco, suggesting they may transfer their loads into a VLCC when they arrive there in early November.
Separately, Greek navel exercises that have been running since May, forcing most ship-to-ship cargo transfers out of the Laconian Gulf and nearby waters, are due to end next month, unless they are extended again.
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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 Oct. 27 edging down to about 290,000 barrels a day from a revised 310,000 the previous week, which as the highest in more than three months.
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, Nov. 5.
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.