Russian oil exports are falling, but the reason may not be US sanctions - Bloomberg
Kyiv • UNN
The average daily volume of oil transshipment from Russian ports in the four weeks to October 26 was 3.72 million barrels, which is 70 thousand barrels less. The decline is due to weather conditions and a reassessment of purchasing plans after US sanctions.
The volume of Russian oil supplies by sea decreased from its highest level in almost two and a half years, with the number of shipments from the Baltic decreasing last week, but this drop may be due more to weather than recent US sanctions, Bloomberg reports, writes UNN.
Details
According to ship tracking data compiled by Bloomberg, the average daily volume of oil transshipment from Russian ports for the four weeks ending October 26 was 3.72 million barrels, which is approximately 70,000 barrels less than the revised figure for the previous reporting period until October 19.
Strong winds in the area of the key Baltic port of Primorsk, with gusts exceeding 80 kilometers per hour on Sunday, according to VisualCrossing.com, could have complicated loading at the end of the week, the publication writes.
The slight decrease in oil supplies occurred precisely against the backdrop of buyers in India and China re-evaluating their plans for purchasing Russian oil after the US ban on transactions with PJSC Rosneft and PJSC Lukoil. Together with PJSC Surgutneftegaz and PJSC Gazprom Neft, which were sanctioned in January, these four companies provided almost 70% of Russian oil exports - about 3.1 million barrels per day - in the first half of the year.
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Earlier sanctions against Surgutneftegaz and Gazprom Neft had little impact on Russian oil supplies, but there are early signs that this time the situation may change, the publication notes.
Indian refinery executives said it was virtually impossible to continue buying from blacklisted Russian producers, prompting them to buy oil from the Middle East and even Latin America.
However, they will continue to buy some Russian oil at discounts from suppliers not subject to sanctions, the publication writes. Meanwhile, Russian exporters continue to load oil onto tankers at near-record rates.
Most of the vessels loading in the Baltic, Arctic, and Black Sea ports do not have a destination beyond the Suez Canal, the publication writes. This has been common practice for many months, but almost all of them eventually reportedly unloaded in India and China. Vessels currently loading in the Baltic and Arctic will not reach Asian ports until November 21, the deadline for ceasing operations with Lukoil and Rosneft, the publication notes.
In addition, the volume of oil for export, as noted, may begin to decline as refineries recover from the lows observed earlier this month, against the backdrop of several key plants resuming operations after damage sustained from drone attacks. If Russia manages to maintain higher refining rates, some of the oil will likely be diverted from export terminals to provide fuel for the military and the domestic market, the publication writes.
Oil shipments
According to ship tracking data and port agent reports, a total of 32 tankers loaded 24.95 million barrels of Russian oil in the week ending October 26. The volume decreased compared to the revised 25.58 million barrels shipped by 34 vessels in the previous week.
On average, daily shipments for the week ending October 26 decreased to 3.56 million barrels per day, the lowest figure in six weeks. In addition, one batch of Kazakh Kebco oil was shipped from Novorossiysk and Ust-Luga during the week, the publication writes.
Over the past week, two fewer tankers departed from Russian Baltic ports, and shipments from the Black Sea also decreased by two tankers compared to the previous week. Exports from the Pacific region increased due to two shipments from the Sakhalin-2 project, compared to zero a week earlier, the publication indicates.
Export value
Over the four-week average, Moscow's gross export value decreased by approximately $60 million to $1.43 billion per week for the 28 days ending October 26, with both export volumes and prices declining.
According to this indicator, export prices for Russian Urals oil from the Baltic and Black Seas fell by approximately $1.50 per barrel to $51.99 and $52.38, respectively. The price of Pacific ESPO oil decreased by $0.80 to an average of $59.97 per barrel, falling below the G7 price cap of $60 for the first time since June. According to Argus Media, prices with delivery to India also decreased, falling by $1.60 to $62.74 per barrel.
On a weekly basis, the average export value was about $1.34 billion for the 7 days to October 26, virtually unchanged from the revised figure for the period to October 19.
Deliveries by destination
Observed deliveries to Russia's Asian customers, including those not specifying a final destination, decreased to 3.36 million barrels per day for the 28 days to October 26, compared to a revised 3.41 million barrels per day for the period to October 19, which was the highest figure since June 2023.
"While the volume of Russian oil heading to both China and India appears to be sharply falling, there is a large volume of oil on vessels for which a final destination has not yet been specified, which allows for a change in this trend," the publication writes. Tankers increasingly do not specify a final destination until they cross the Arabian Sea, while some never specify a final destination, even after mooring for unloading.
Oil deliveries on tankers heading to Chinese ports fell to 1.1 million barrels per day in the four weeks to October 28, and volumes destined for India fell to 790,000 barrels per day, the publication writes. But, as indicated, there is an equivalent of more than 1.4 million barrels per day on vessels that have not yet specified a final destination. In the past, almost all such cargoes reportedly went to India or China.
Deliveries to Turkey in the four weeks to October 26 increased to approximately 330,000 barrels per day. Supplies to Syria fell to zero from 36,000 barrels per day in the period to October 19. Tankers carrying Russian oil to this Eastern Mediterranean country rarely report their destination and usually disappear from automatic tracking systems when south of Crete, making it difficult to estimate deliveries before the vessel's arrival.