(Bloomberg) -- Russia’s seaborne crude exports rose before OPEC+ ministerial discussions on production policy for the early part of 2025, amid indications that the alliance may have to delay for a third time plans to begin restoring barrels to the market.
Four-week average volumes increased by about 50,000 barrels a day in the period to Dec. 1, driven higher for the first time in three weeks by a surge in weekly shipments.
The gains were concentrated at the country’s western ports, where flows from all export terminals recovered from two weeks of below-normal rates. Cargo loading at the key Pacific site of Kozmino was hit by strong winds during part of the week, which reduced operations by a third.
The increase in overall flows came before discussions among OPEC+ oil ministers that will now take place on Thursday after they were postponed from Sunday. Analysts expect that they will again put back their plan to start restoring curbed barrels to the market, with a three-month delay emerging as the main proposal.
It’s now two years since Western nations imposed sanctions designed to cut the Kremlin’s oil income, but there’s little sign that they’ve been effective. As intended, Moscow’s oil flows have been maintained, but the discounts that it’s forced to accept in order to secure buyers are now minimal. And the creation of a huge shadow fleet of tankers, which appear largely immune to sanctions, has taken the trade out of the reach of authorities based in the US, UK and European Union.
Separately, Panama is canceling the registration of six ships sailing under its flag that were sanctioned by the UK last week, a small boost for those nations that have slapped restrictions on Moscow’s exports machine. The authorities in London added another 30 tankers to a list of vessels sanctioned for carrying Russian oil. Fourteen of them had already been targeted by either the US or the European Union.
Meanwhile, Russia’s refinery runs hit a three-month high in November after completion of seasonal maintenance, potentially making less crude available for export.
Crude Shipments
A total of 30 tankers loaded 23.5 million barrels of Russian crude in the week to Dec. 1, vessel-tracking data and port-agent reports show. The volume was up from a revised 19.5 million barrels on 26 ships the previous week.
Daily crude flows in the week to Dec. 1 jumped by about 570,000 barrels to 3.36 million. The increase was driven by higher flows from the country’s western ports, with more ships leaving its Baltic, Black Sea and Arctic ports. Strong winds hit loading operations at the main Pacific export terminal at Kozmino.
Less volatile four-week average flows also increased, rising for the first time in three weeks to average 3.13 million barrels a day, an increase of 50,000 from the revised figure for the period to Nov. 24.
Crude shipments so far this year are about 60,000 barrels a day, or 1.8%, below the average for the whole of 2023.
Two cargoes of Kazakhstan’s KEBCO crude were loaded 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 Kremlin’s oil income rose, with a small decrease in weekly-average prices for Russia’s major crude streams only partially offsetting the jump in the weekly export volumes. The gross value of Moscow’s shipments rose by about $230 million to $1.5 billion in the week to Dec. 1.
Export values at Baltic ports were down week-on-week by about $0.10 a barrel. Prices for Black Sea loading Urals fell by about $0.50 a barrel and key Pacific grade ESPO dropped by about $0.70, compared with the previous week. Delivered prices in India were down by about $0.10 a barrel, all according to numbers from Argus Media.
Four-week average income increased, rising to about $1.41 billion a week, from a revised $1.39 billion in the period to Nov. 25.
On this basis, the price of Russia’s shipments from the Baltic in the four weeks to Dec. 1 was up by about $0.50 a barrel from the period to Nov. 25. Prices for key Pacific grade ESPO and for Black Sea Urals shipments were higher by about $0.40 a barrel. The delivered price for shipments to India was up by a more modest $0.20 a barrel.
Flows by Destination
-
Asia
Observed shipments to Russia’s Asian customers, including those showing no final destination, edged higher to 2.71 million barrels a day in the four weeks to Dec. 1 from a revised 2.7 million in the period to Nov. 24.
About 1.29 million barrels a day of crude were loaded onto tankers heading to China. That’s down from a revised 1.43 million barrels a day in the period to Nov. 24
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 1.14 million barrels a day, down from a revised 1.17 million for the period to Nov. 24 and 1.46 million in the four weeks to Nov. 17.
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 220,000 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 50,000 barrels a day in the four weeks to Dec. 1, 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.
One cargo of Urals was delivered to the El-Hamra terminal on Egypt’s Mediterranean coast, the tracking data show. That’s the first delivery to the terminal since two cargoes were discharged there in July and August 2022.
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.
-
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. Flows in the 28 days to Dec. 1 rose to about 400,000 barrels a day, the highest level since June. Fires at two Turkish refineries in November may hit crude deliveries to the country in the coming weeks.
NOTES
This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. There will be no update next week; publication will resume on Tuesday, Dec. 17.
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.