(Bloomberg) — Russia’s crude shipments tumbled to the lowest since July last week, sending the country’s gross income from the critical trade to the smallest in around eight months.
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Four-week average crude volumes dropped to 3.1 million barrels a day in the week to Sept. 22, down by 115,000 barrels a day from the previous period. Weekly flows, which are more volatile, fell by about 390,000.
A four-day gap in activity at the Kozmino export terminal on Russia’s Pacific coast suggests that maintenance work at the port, or the pipeline supplying it, sparked a sharp drop in the country’s eastern flows.
Gross income shrank to the lowest since late January on both a weekly and four-week basis, as the decline in volumes outweighed the first price gain for the country’s flagship Urals crude in three weeks. That $3-a-barrel boost nudged the grade back above the $60 threshold that the G7 nations sought to impose on Moscow as punishment for the Ukraine invasion.
The US is adding to the pressure on the Kremlin caused by recent oil price weakness. The Treasury Department’s Office of Foreign Assets Control has asked at least one shipping insurer for information on 14 companies it suspects may have violated sanctions on Russian oil.
Russia’s average oil-processing levels from Sept. 12-18 dropped to 5.28 million barrels a day, the lowest weekly level since late June, as the nation’s refineries are entering seasonal maintenance.
Crude Shipments
A total of 27 tankers loaded 20.23 million barrels of Russian crude in the week to Sept. 22, vessel-tracking data and port-agent reports show. The volume was down from a revised 22.95 million barrels on 31 ships the previous week.
It means Russia’s seaborne daily crude flows in the week to Sept. 22 fell by about 390,000 barrels to 2.89 million. That’s the lowest since the first week of July.
The less volatile four-week average also fell, dropping by 115,000 barrels a day to 3.1 million from 3.21 million the previous week. It’s only the third time this year that this measure of shipments has dropped so low.
Crude shipments so far this year are about 60,000 barrels a day below the average for the whole of 2023.
The slump in flows from Kozmino was largely offset by a surge in shipments from the Baltic port of Primorsk.
Two cargoes of Kazakhstan’s KEBCO crude were loaded at Novorossiysk on the Black 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 got very close to meeting its OPEC+ crude-output target last month, following a push from the group to improve adherence to its supply deal.
Export Value
The gross value of Russia’s crude exports fell to $1.29 billion in the seven days to Sept. 22, from $1.43 billion in the period to Sept. 15. The drop in weekly flows was only partly offset by an increase in prices for Russia’s major crude streams.
Export values at Baltic ports were up week-on-week by about $3 a barrel, while shipments from the Black Sea rose by about $2.90 a barrel. Prices for key Pacific grade ESPO also increased by about $2.90 compared with the previous week. Delivered prices in India rose less strongly, increasing by about $1.50 a barrel, all according to numbers from Argus Media.
Urals crude shipped from Russia’s Baltic ports traded at an average $62.50 last week, Argus Media data showed. That was after the average dropped below $60 a barrel the previous week, the first time it had been below the G7 price cap since December.
Four-week average income fell to its lowest since January, dropping to about $1.42 billion a week. The four-week average peak of $2.17 billion a week was reached in the period to June 19, 2022.
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
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Asia
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Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to 2.92 million barrels a day in the four weeks to Sept. 22. That’s about 10% below the average level seen during the recent peak in April.
About 1.2 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 1.57 million barrels a day, down from a revised 1.67 million for the period to Sept. 15.
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 100,000 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 50,000 barrels a day in the four weeks to Sept. 22, 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.
Greece has extended naval exercises in an area that’s become associated with the transfer of Russian crude until November. These naval drills haven’t entirely halted ship-to-ship transfers of Russian crude in the area, though. The supertanker Alma recently received crude from two smaller tankers, Sagar Violet and Arlan, in a narrow channel located between two areas that have been closed to shipping. TK TK
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Europe and Turkey
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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 Sept. 22 rising to about 220,000 barrels a day. That’s the most in five weeks.
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. 1.
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.
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