(Bloomberg) -- Russia’s seaborne crude shipments have fallen by about 11% since October, with maintenance work at one of the country’s main export terminals pushing flows even lower in the latest week.
Flows have settled just above 3 million barrels a day after weekly fluctuations are smoothed out. Four-week average volumes stood at 3.06 million barrels a day in the period to Dec. 15, down from a recent peak of 3.46 million two months ago.
The drop comes as Western powers are stepping up pressure on the shadow fleet of tankers built up by Russia to keep its oil flowing and as refinery runs hit their highest weekly rate since mid-August, potentially reducing volumes of crude available for export. Russia has also been under mounting pressure to abide by its OPEC+ production target, which has been extended to the end of March, after the group again delayed plans to start raising production.
European nations have ramped up sanctions on the vessels that carry Moscow’s oil while the US is weighing new, harsher measures just weeks before Donald Trump returns to the White House.
The European Union added 42 oil tankers to its list of sanctioned vessels on Monday, though more than half of them had already been sanctioned by the UK. Separately, 12 European countries are set to clamp down on tankers moving Russian petroleum around the world by asking to see how they’re protected against oil spills and other high-cost claims.
Ukraine, meanwhile, has identified 238 tankers it says belong to the shadow fleet, with a view to authorities sanctioning even more of the carriers. There’s evidence that the actions have an impact, with almost two-thirds of tankers sanctioned by Western nations for their involvement in the Russian oil trade remaining idle, with many gathering in locations close to Russian ports.
Moscow has extended until the end of June its own ban on oil sales to foreign buyers that adhere to a price cap mechanism imposed by the G7 nations in response to Russia’s 2022 invasion of Ukraine.
Meanwhile, the country’s oil exporters are cementing their ties with buyers in India. Rosneft has agreed to supply about 500,000 barrels a day of crude to Reliance Industries under a 10-year contract that’s due to start in January.
Refinery runs continued to rise after completion of seasonal maintenance. The increase this month has been supported by the lifting of a gasoline-export ban for producers of the fuel and recent weakness in the ruble, benefiting export-focused refineries.
Crude Shipments
A total of 27 tankers loaded 20.8 million barrels of Russian crude in the week to Dec. 15, vessel-tracking data and port-agent reports show. The volume was down from 22 million barrels on 29 ships the previous week.
Daily crude flows in the week to Dec. 15 fell by about 170,000 barrels to 2.97 million. That followed a drop of about 220,000 barrels a day in the week to Dec. 8.
The drop resulted from a four-day halt in departures from the main Baltic port of Primorsk. A similar gap in a partial loading program for the port, seen by Bloomberg, suggests that the disruption was related to work on the terminal or the pipeline serving it.
In contrast, cargo loading at the key Pacific site of Kozmino has remained strong, with 11 tankers loading in each of the past two weeks, just one vessel short of the record number handled in a seven-day period.
Less volatile four-week average flows moved in the opposite direction, edging higher to average 3.06 million barrels a day, an increase of 30,000 from the period to Dec. 8.
Crude shipments so far this year are about 70,000 barrels a day, or 2%, below the average for the whole of 2023.
No cargoes of Kazakhstan’s KEBCO crude were loaded 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 March, after a planned easing of some output cuts was delayed for a third time.
Moscow also pledged to make deeper output cuts in October and November this year, then again between March and September of 2025, to compensate for pumping above its OPEC+ quota earlier this year.
Export Value
The Kremlin’s oil income slipped in line with crude flows, with weekly-average prices for Russia’s major crude streams moving different directions. The gross value of Moscow’s shipments fell by about $70 million to $1.36 billion in the week to Dec. 15.
Export values at Baltic ports were down week-on-week by about $0.60 a barrel. In contrast, prices for Black Sea loading Urals rose by about $0.20 a barrel and key Pacific grade ESPO was up by about $0.40, compared with the previous week. Delivered prices in India were down marginally, all according to numbers from Argus Media.
Four-week average income increased, rising to about $1.39 billion a week, from $1.36 billion in the period to Dec. 8.
On this basis, the price of Russia’s shipments from the Baltic in the four weeks to Dec. 15 was up by about $0.40 a barrel from the period to Dec. 8. Prices for key Pacific grade ESPO and for Black Sea Urals shipments were higher by about $0.50 a barrel and $0.30 a barrel respectively. The delivered price for shipments to India was also up 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 higher to 2.77 million barrels a day in the four weeks to Dec. 15 from 2.68 million in the period to Dec. 8.
About 1.35 million barrels a day of crude were loaded onto tankers heading to China. That’s up from 1.27 million barrels a day in the period to Dec. 8.
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 1.19 million barrels a day, down from 1.22 million for the period to Dec. 8.
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 200,000 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 30,000 barrels a day in the four weeks to Dec. 15, 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.
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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. Flows in the 28 days to Dec. 15 fell to about 300,000 barrels a day, the lowest in seven weeks. Fires at two Turkish refineries in November may have hit the amount of crude heading for the country.
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, Jan. 7.
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.