Russia’s seaborne crude shipments slipped back from their highest in nearly two and a half years, with fewer shipments from the Baltic last week. But the drop may have more to do with the weather than the latest US sanctions.
Four-week average volumes from the country’s ports were 3.72 million barrels a day to Oct. 26, according to vessel-tracking data compiled by Bloomberg, down by about 70,000 from the revised figure for the period to Oct. 19. The average provides a clearer picture of underlying trends than more volatile weekly figures.
Strong winds in the vicinity of the key Baltic port of Primorsk, gusting in excess of 50 miles an hour on Sunday according to figures from VisualCrossing.com, may have hampered loading operations at the end of the week.
The small drop in flows comes just as buyers in India and China reassess their purchases of Russian crude in the wake of a US ban on dealings with Rosneft PJSC and Lukoil PJSC. Together with Surgutneftegas PJSC and Gazprom Neft PJSC, both sanctioned in January, the four companies accounted for almost 70% of Russia’s crude exports — around 3.1 million barrels a day — in the first half of the year.
The earlier sanctions on Surgutneftegas and Gazprom Neft had little impact on Russian crude flows, but there are early signs that things could be different this time.
Senior executives at Indian refiners said it would be all but impossible to continue buying from the blacklisted Russian producers, prompting them to snap up crudes from the Middle East and even Latin America. But they will keep buying some discounted Russian cargoes from non-sanctioned suppliers. Russian exporters, meanwhile, continue to put oil into tankers at near record rates.
Most of the ships loading at ports in the Baltic, Arctic and Black Sea show no destination beyond the Suez Canal. That’s been a common feature for many months, but almost all have ended up offloading their cargoes in India and China. Those loading now in the Baltic and Arctic won’t reach Asian ports before the Nov. 21 deadline for halting dealings with Lukoil and Rosneft.
Separately, the amount of crude available for export may begin to ease, with refinery runs recovering from the lows seen earlier this month, as several key plants repaired damage from Ukrainian drone strikes. If Russia is able to maintain higher processing rates, some crude is likely to be diverted away from export terminals to provide fuel for the military and the domestic market.
Crude Shipments
A total of 32 tankers loaded 24.95 million barrels of Russian crude in the week to Oct. 26, vessel-tracking data and port-agent reports show. The volume was down from a revised 25.58 million barrels on 34 ships the previous week.
On a daily average basis, shipments in the week to Oct. 26 slipped to 3.56 million barrels a day, their lowest in six weeks. Separately, one cargo of Kazakhstan’s Kebco grade was shipped from each of Novorossiysk and Ust-Luga during the week.
Two fewer tankers left Russia’s Baltic ports in the most recent week, with shipments out of the Black Sea also down by two from the previous week. Pacific exports rose with two cargoes loaded from the Sakhalin 2 project, up from none the previous week.
Export Value
On a four-week average basis, the gross value of Moscow’s exports fell by about $60 million to $1.43 billion a week in the 28 days to Oct. 26, with export quantities and prices both falling.
Using this measure, the export prices of Russia’s Urals from the Baltic and Black Sea both fell by about $1.50 a barrel to $51.99 and $52.38, respectively. The price of Pacific ESPO crude dropped by $0.80 to average $59.97 a barrel, slipping below the G-7 price cap of $60 for the first time since June. Delivered prices in India also dropped, falling by $1.60 to $62.74 a barrel, all according to numbers from Argus Media.
On a weekly basis, the value of exports averaged about $1.34 billion in the 7 days to Oct. 26, little changed from the revised figure for the period to Oct. 19.
Flows by Destination
Observed shipments to Russia’s Asian customers, including those showing no final destination, slipped to 3.36 million barrels a day in the 28 days to Oct. 26, down from a revised 3.41 million barrels a day in the period to Oct. 19, which was their highest since June 2023.
While the amount of Russian crude heading to both China and India appears to be falling steeply, there are large quantities on vessels yet to show a final destination, allowing for that pattern to be reversed. Tankers are increasingly showing no final destination until they are well across the Arabian Sea, while some never show a final destination, even after mooring to discharge.
Flows on tankers signaling Chinese ports fell to 1.1 million barrels a day in the four weeks to Oct. 28, while the amount destined for India fell to 790,000 barrels a day. But there is the equivalent of more than 1.4 million barrels a day on vessels yet to show a final destination.
Of that, about 1.3 million barrels a day is on ships from Russia’s western ports showing their destination as Port Said or the Suez Canal, or those from Pacific ports with no clear delivery point, and a further 140,000 barrels a day is on tankers yet to signal a destination.
In the past, those cargoes have almost all ended up in India or China.
Flows to Turkey in the four weeks to Oct. 26 rose to about 330,000 barrels a day. Shipments to Syria fell to zero a day from 36,000 barrels a day in the period to Oct. 19. Tankers hauling Russian crude to the east Mediterranean nation rarely signal their destination and usually disappear from automated tracking systems when they’re south of Crete, making it difficult to estimate flows in advance of ship’s arriving off the port of Banias.
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