Russia’s Seaborne Crude Shipments Rise to the Highest Since June

Russia’s Seaborne Crude Shipments Rise to the Highest Since June

(Bloomberg) — Russia’s crude shipments rose for a fourth week to the highest since late June as seasonal maintenance is set to push refinery processing to its lowest in more than two years.

Most Read from Bloomberg

Four-week average cargoes jumped by 140,000 barrels a day in the week to Oct. 20 to reach 3.47 million. Refining is on course to slump to the lowest since May 2022, leaving more crude available for export.

Exports to Asia, including barrels heading toward the Suez Canal that are likely to end up in India, reached the highest in more than five months to drive the overall advance. The region is the destination for about 95% of Russia’s seaborne crude, with almost all of it heading to India and China.

The gains saw the gross value of Russia’s exports rise to $1.59 billion a week in the 28 days to Oct. 20, from $1.52 billion in the four-week period to Oct. 13. That was the highest since mid-August.

As efforts to constrain the Kremlin’s ability to finance its war in Ukraine continue, the UK government added 18 more tankers to its sanctions list last week, barring them from UK ports and blocking their access to British maritime services. In addition, three government bodies are working together to challenge Russian shadow fleet oil tankers perceived to have dubious insurance. The UK Foreign, Commonwealth and Development Office didn’t specify how such interventions would occur, or how insistent they would be.

Sanctions against tankers hauling Russian oil have become less effective in recent months, with about one-third of those cited before the UK’s latest addition now back at work. Most of those brought into use were sanctioned by the UK.

Crude Shipments

A total of 32 tankers loaded 24.21 million barrels of Russian crude in the week to Oct. 20, vessel-tracking data and port-agent reports show. The volume was up from 23.14 million barrels on 31 ships the previous week.

That boosted four-week average flows to 3.47 million barrels a day, up by 142,000 from the previous week.

Russia’s more volatile daily crude flows in the week to Oct. 20 rose by about 150,000 barrels to 3.46 million, driven by an increase in flows from the country’s Arctic ports.

Shipments from the Baltic ports of Primorsk and Ust-Luga are set to rise to 7.1 million tons or 1.68 million barrels a day in October, the highest daily volume since April.

Crude shipments so far this year are about 40,000 barrels a day, or 1.3%, below the average for the whole of 2023.

One cargo of Kazakhstan’s KEBCO crude was loaded at Ust-Luga on the Baltic 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 November, after a planned easing of some output cuts was delayed by two months.

Moscow has 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.

Russian data show the nation pumped marginally below its OPEC+ crude-output target in September, but Moscow’s assertion was contradicted by the secondary sources that OPEC uses to monitor compliance with output targets, who pegged Russia’s September production about 23,000 barrels above its allowance.

Export Value

Four-week average income advanced, increasing to about $1.59 billion a week, from $1.52 billion in the period to Oct. 13. That was the highest since the period ending Aug. 11. The four-week average peak of $2.17 billion a week was reached in the period to June 19, 2022.

On this basis, the price of Russia’s shipments from the Baltic and Black Sea in the four weeks to Oct. 20 was down by about $0.30 from the period to Oct. 13. Prices for key Pacific grade ESPO were up by about $0.70.

In contrast, in the seven days to Oct. 20, the value of Russia’s crude exports slipped to $1.57 billion from $1.6 billion in the period to Oct. 13. Income fell with a drop in weekly-average prices for Russia’s major crude streams more than offsetting the higher export volume. The price drop was in line with a broader sell-off in oil that saw US benchmark WTI crude post its biggest weekly decline in more than a year.

Export values at Baltic ports were down week-on-week by about $4.80 a barrel, while shipments from the Black Sea fell by about $5.10 a barrel. Prices for key Pacific grade ESPO dropped by about $2.90 compared with the previous week. Delivered prices in India were also down, falling by about $5.20 a barrel, all according to numbers from Argus Media.

During the first four weeks after the Group of Seven nations’ price cap on Russian crude exports came into effect in early December 2022, the value of seaborne flows fell to a low of $930 million a week, but soon recovered.

Flows by Destination

  • Asia

    Most Read from Bloomberg

Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to 3.18 million barrels a day in the four weeks to Oct. 20. That’s the highest in more than five months and only about 2% below the average level seen during the recent peak in April.

About 1.36 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 1.6 million barrels a day, down from a revised 1.78 million for the period to Oct. 13.

The Indian figures, in particular, are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations. All of those are heading from Russia’s western ports toward the Suez Canal, with most of the cargoes that head through the waterway ending up in the south Asian nation.

The equivalent of about 160,000 barrels a day was on vessels signaling Port Said or Suez in Egypt. Those voyages typically end at ports in India or China and show up as “Unknown Asia” until a final destination becomes apparent.

The “Other Unknown” volumes, running at about 60,000 barrels a day in the four weeks to Oct. 20, 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.

The Aframax tanker Neon transferred its cargo into an unidentified vessel off Egypt’s Port Said last week and a second, the Lefkada, appears poised to do the same this week.

Separately, Greece has extended naval exercises until November in an area that’s become associated with the transfer of Russian crude.

  • Europe and Turkey

    Most Read from Bloomberg

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 Oct. 20 rising for a third week to reach about 290,000 barrels a day, their highest in more than three months.

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, Oct. 29.

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.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.

EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel210520-twitter-verified-cs-70cdee.jpg (1500×750)

Support Independent Journalism with a donation (Paypal, BTC, USDT, ETH)
WhatsApp channel DJ Kamal Mustafa