Russia’s weekly crude exports fell by the most in more than three months in the seven days to June 23, with the maintenance at key ports also trimming the less volatile four-week average according to a report by Bloomberg. The work at Primorsk on the Baltic Sea and Kozmino on the Pacific coast cut shipments through Russia’s two busiest oil terminals, with no departures during the week.
Separately, the vessels that Moscow relies on to transport its oil are increasingly being targeted by the Western authorities. The European Union (EU) is the latest to impose sanctions on specific Russian ships, identifying 17 crude oil and refined products carriers in its current round of sanctions, as per Bloomberg
The gross value of Russia’s crude shipments fell by 14 per cent in the seven days to June 23, compared with an 18 per cent drop in shipments. The moves come as Moscow continues to test the effectiveness of sanctions imposed in response to its invasion of Ukraine in February 2022.
Three of the 21 tankers owned by state-controlled Sovcomflot PJSC have now loaded crude after lying idle for several months. Bloomberg reported, quoting vessel-tracking data and port agent reports, that 27 tankers loaded 21.29 million barrels of Russian crude in the week of June 23. This was down sharply from 25.91 million barrels the previous week.
Russia’s seaborne crude flows in the reporting week dropped by 660,000 barrels per day (bpd) to 3.04 million, the lowest in more than three months. The less volatile four-week average was also down, falling by about 45,000 bpd to 3.37 million, according to the data quoted in the report.
A week-on-week slump in shipments from Russia’s two most important crude export ports — Primorsk on the Baltic Sea and Kozmino on the Pacific coast — was partly offset by more ships leaving Novorossiysk and the Arctic terminals at Murmansk. After last week’s slump, the crude shipments so far this year are running about 10,000 bpd above the average for 2023.
Russia terminated its export targets at the end of May, opting instead to restrict production, in line with its partners in the Organisation of Petroleum Exporting Countries (OPEC). Russia's output target is set at 8.978 million bpd until the end of September, after which it is scheduled to rise at a rate of 39,000 bpd each month until September 2025, subject to market conditions.
Russia’s oil flows continue to be complicated by the Greek navy carrying out exercises in an area close to the transfer of the nation’s crude. These activities have now been extended to July 15 which may also restrict Russian oil exports.
The observed shipments to Russia’s top Asian oil customers, including those showing no final destination, slipped back below three million barrels per day in the four weeks to June 23. The shipments averaged 2.96 million bpd during the period, from just over three million in the period to June 16.
The flows on ships destined in India averaged 1.66 million bpd, unchanged from the revised figure for the period to June 16. Both the Chinese and Indian figures are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations, as per the report.
India is a net importer of crude oil and is dependent on imports to meet over 85 per cent of its crude oil requirements (for the petrol, diesel, aviation fuel refinement) and around 50 per cent of its natural gas requirements.
India's oil imports from Russia rose to a record of about 2.1 million bpd in May as discounts for Russian oil widened on lower demand from China, Reuters reported quoting trade sources and shipping data. Supply from Saudi Arabia dropped to a 10-month low, after Saudi Aramco hiked term prices for a second month in May.
Indian refiners have been banking on Russian oil, sold at a discount after the Western sanctions imposed on Russia post the Ukraine war. According to industry experts, Russian oil was available in plenty and at better discounts last month due to lower demand from China. India's Russian oil imports in May rose 14.7 per cent from April and 5.9 per cent from a year ago, according to Reuters.
India's private refiners such as Reliance Industries and Nayara Energy, majority owned by Russian entities, have signed a term deal to buy Russian oil. On the other hand, state-owned refiners Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) and Mangalore Refinery and Petrochemicals are buying Russian oil from the spot markets.
Russia continued to be the top oil supplier to India, followed by Iraq and Saudi Arabia. Also, Indian refiners received 176,000 bpd oil from the US in May. Higher intake of Russian oil has been denting the share of the Middle Easter oil in India's crude mix and also that of oil producers cartel OPEC, the data showed.
With inputs from Reuters, Bloomberg
