Russia's Crude Exports Cling to Gains With Refineries Hobbled

(Bloomberg) -- Russia’s seaborne crude exports maintained a multimonth high in the four weeks to April 21 as the country’s refineries struggled to recover from flooding and Ukrainian drone attacks.

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Oil processing is near the lowest since May last year after floods forced the Orsk refinery offline, while runs at plants damaged by military strikes continue to lag normal levels, encouraging diversion of crude supplies into exports. The April loading program at the key Baltic ports has been revised to the highest since May 2023.

Moscow has been able to maintain export levels to major customers such as China and India even as the US intensifies sanctions, with new traders appearing whenever an existing one attracts the attention of American authorities. In the trade with India, firms with names unfamiliar to even the most experienced merchants have emerged to handle shipments between the OPEC+ producer and the world’s third-largest importer and consumer.

Still, the latest data showed that more volatile weekly flows gave up most of the gains from the previous seven days, with the slump driven by a drop in the amount of Russian crude exported through the port of Novorossiysk on the Black Sea. That, combined with a big number a month ago, is likely to push the four-week figure lower next week.

The gross value of Russia’s crude exports in the four weeks to April 21 was up by about $24 million to $1.94 billion a week from the period to April 14, helped by higher prices.

Four-week average shipments to Asia — predominantly China and India — also remained close to the highest since June at 3.33 million barrels a day.

China’s imports of Russian crude surged to a record high in March, customs data show. The Asian nation imported 10.81m tons of crude, equivalent to about 2.56 million barrels a day, from Russia in March, the most in data going back to 2004. The numbers include amounts delivered by pipeline as well as by ship.

The backlog of Russia’s Sokol crude that built up after being turned away by Indian refiners has now almost disappeared. About 9.1 million barrels, half of the total, have been delivered to refineries in China. Another 7 million barrels have eventually found their way back to India. Two cargoes have been delivered to Pakistan.

That leaves just 1.4 million barrels still to show a destination. Half of those are being discharged from the tanker that has been storing them since January onto a smaller vessel. The transfer is taking place in the Strait of Malacca, suggesting the cargoes could eventually end up in India. All of the Sokol cargoes loaded since mid-February headed directly to China.

Flows by Destination

Russia’s seaborne crude flows in the week to April 21 gave up most of the previous week’s surge, falling by 500,000 barrels a day to 3.45 million.

The slump was driven by a drop in the amount of Russian crude exported through the port of Novorossiysk on the Black Sea, which were down by more than 60%, vessel-tracking data compiled by Bloomberg show.

The less volatile four-week average was virtually unchanged at 3.66 million, the highest since June.

Weekly shipments were about 135,000 barrels a day lower than the average seen in May and June, or about 15,000 barrels a day below Russia’s April target, which is part of the OPEC+ alliance’s broader effort to curb supplies and support prices. The four-week average was about 195,000 barrels a day above the target.

Russia said it would cut crude exports during April by 121,000 barrels a day from their average May-June level as part of the wider OPEC+ initiative, as Moscow shifts more of the burden onto production targets, which are preferred by other members of the group. Seaborne shipments in the first three months of the year exceeded Russia’s target level for that period by just 16,000 barrels a day.

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.

Observed shipments to Russia’s Asian customers, including those showing no final destination, edged lower to 3.33 million barrels a day in the four weeks to April 21, from 3.34 million in the previous four-week period.

About 1.35 million barrels a day of crude was 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 about 1.46 million barrels a day.

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.

The equivalent of about 310,000 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 in the chart below as “Unknown Asia” until a final destination becomes apparent.

The “Other Unknown” volumes, running at about 180,000 barrels a day in the four weeks to April 21, are those on tankers showing no clear destination. Most of those cargoes originate from Russia’s western ports and go on to transit the Suez Canal, but some could end up in Turkey. Others could be moved from one vessel to another, with most such transfers now taking place in the Mediterranean, off the coast of Greece, or more recently off Sohar in Oman.

Europe and Turkey

Russia’s seaborne crude exports to European countries have ceased.

With flows to Bulgaria halted at the end of last year, Turkey is now the only short-haul market for shipments from Russia’s western ports.

Exports to Turkey were stable at 323,000 barrels a day in the four weeks to April 21.

Export Value

Following the abolition of export duty on Russian crude, we have begun to track the gross value of seaborne crude exports, using Argus Media price data and our own tanker tracking.

The gross value of Russia’s crude exports fell back to $1.84 billion in the seven days to April 21 from $2.15 billion in the period to April 14. However, four-week average income was up, rising by about $24 million to $1.94 billion a week, aided by higher oil prices. The four-week average is still below its peak of $2.17 billion a week, reached in the period to June 19, 2022. The highest it reached last year was $2 billion a week in the period to Oct. 22.

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.

The chart above shows a gross value of Russia’s seaborne oil exports on a weekly and four-week average basis. The value is calculated by multiplying the average weekly crude price from Argus Media Group by the weekly export flow from each port. For shipments from the Baltic and Arctic ports we use the Urals FOB Primorsk dated, London close, midpoint price. For shipments from the Black Sea we use the Urals Med Aframax FOB Novorossiysk dated, London close, midpoint price. For Pacific shipments we use the ESPO blend FOB Kozmino prompt, Singapore close, midpoint price.

Export duty was abolished at the end of 2023 as part of Russia’s long-running tax reform plans.

Ships Leaving Russian Ports

The following table shows the number of ships leaving each export terminal.

A total of 32 tankers loaded 24.1 million barrels of Russian crude in the week to April 21, vessel-tracking data and port agent reports show. That was down by about 3.5 million barrels, reversing almost all of the previous week’s gain.

In addition to the Russian barrels, one cargo of KEBCO was loaded at Ust-Luga and two at Novorossiysk during the week.


Note: This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. Weeks run from Monday to Sunday. The next update will be on Tuesday, April 30.

Note: All figures exclude cargoes owned by Kazakhstan’s KazTransOil JSC, which transit Russia and are shipped from Novorossiysk and Ust-Luga as KEBCO grade crude.

If you are reading this story on the Bloomberg terminal, click here or a link to a PDF file of four-week average flows from Russia to key destinations.

--With assistance from Sherry Su.

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