(Bloomberg) -- Russia’s seaborne crude exports plunged in the latest week, with the biggest decline since early July dragging down the four-week average.
Weekly flows dropped by about 530,000 barrels a day in the period to Nov. 3, as Russia made no shipments from the Arctic port of Murmansk and just one from Novorossiysk on the Black Sea. Four-week exports fell by 90,000 barrels a day, extending their decline for a second week, despite major ports on the Baltic and Pacific coasts operating near peak levels.
The drop in cargoes from Novorossiysk mirrors a four-day gap in the loading program; such periods often indicate maintenance at a port or on the pipelines serving it. The slump in Arctic shipments may simply be a reflection of scheduling, with three tankers loading the previous week and four more at, or very close to, Murmansk fjord by the end of the most recent period.
Russia’s primary refining rate rose sharply in the final week of October, as seasonal maintenance passed its peak. That likely reduced the volume of crude available for export.
India’s Petroleum Minister Hardeep Puri says his country, already the largest market for Moscow’s seaborne crude, can further boost oil imports from Russia if prices are right, adding that there had recently been a small decline, with other sources becoming more competitive. Russia now provides 38% of India’s crude imports, he added.
The drop in shipments came as the OPEC+ group of oil producers, which Russia leads alongside Saudi Arabia, delayed for the second time a plan to start adding back some of the supply it has cut in recent years. Moscow will have to wait until at least the start of next year to enjoy a rising production target, though that could be postponed again.
Crude Shipments
A total of 29 tankers loaded 21.11 million barrels of Russian crude in the week to Nov. 3, vessel-tracking data and port-agent reports show. The volume was down from 24.97 million barrels on 32 ships the previous week.
Daily crude flows in the week to Nov. 3 slumped by about 530,000 barrels to 3.02 million, the lowest in six weeks. The drop was driven by lower flows from the country’s Black Sea and Arctic ports, which more than offset higher shipments from the Pacific.
Less volatile four-week average flows also fell, dropping for a second week to average 3.32 million barrels a day, down by 90,000 from the period to Oct. 27.
Crude shipments so far this year are about 50,000 barrels a day, or 1.4%, 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 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 effect on the Kremlin’s oil income from the drop in flows was boosted by declines in the price of Russian crude, which together pushed the gross value of Moscow’s exports down by about $250 million to $1.35 billion in the week to Nov. 3.
Income fell with a slump in weekly-average prices for Russia’s major crude streams adding to the effect of the lower export volume. The price drop was in line with broader declines for oil after Iran’s energy infrastructure was spared in Jerusalem’s retaliation for the missile barrage that the Persian Gulf nation launched against Israel at the start of last month.
Export values at Baltic ports were down week-on-week by about $2.30 a barrel. Prices for Black Sea loading Urals and key Pacific grade ESPO fell by about $1.90 compared with the previous week. Delivered prices in India were down by a similar amount, all according to numbers from Argus Media.
Four-week average income slipped to about $1.53 billion a week, from $1.57 billion in the period to Oct. 27.
On this basis, the price of Russia’s shipments from the Baltic and Black Sea in the four weeks to Nov. 3 was down by about $0.80 a barrel from the period to Oct. 27. Prices for key Pacific grade ESPO were lower by about $0.30 a barrel.
Flows by Destination
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Asia
Observed shipments to Russia’s Asian customers, including those showing no final destination, edged lower to 3.03 million barrels a day in the four weeks to Nov. 3. That’s about 6% below the average level seen during the recent peak in April.
About 1.3 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 1.27 million barrels a day, down from a revised 1.58 million for the period to Oct. 27.
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 140,000 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 320,000 barrels a day in the four weeks to Nov. 3, 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, Cankiri and Sakarya, are signaling their destinations as OPL Morocco, suggesting they may transfer their loads into a VLCC when they arrive there in the coming days.
At least nine tankers that have loaded cargoes at Russia’s Baltic ports since Oct. 22 remain anchored off Ust-Luga showing no destination. Similar delays have been seen from time-to-time in the past.
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 this 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 Nov. 3 unchanged at about 290,000 barrels a day.
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. 12.
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.
TK TK If you are reading this story on the Bloomberg terminal, click for alink to a PDF file of four-week average flows from Russia to key destinations.
--With assistance from Sherry Su.
©2024 Bloomberg L.P.