Russia’s Crude Exports Slump to the Lowest Since September

(Bloomberg) - Russia's seaborne crude exports fell to the lowest since September, with shipments from the country's Baltic ports running well below last month's rate.

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Four-week average flows slipped by about 150,000 barrels a day in the period to Nov. 17, driven lower by the biggest drop in weekly exports since early July.

This month's loading schedules for the main Baltic port of Primorsk are thinner than in October, with sixteen cargoes scheduled to load in the first 17 days of November, compared with 22 a month earlier. Russia's primary refining rate rose again in the second week of November, potentially reducing the volume of crude available for export.

Overall shipments from Russia's western ports fell by almost 30% from the previous week, while the number of tankers leaving the Pacific ports was unchanged. All cargoes leaving the eastern ports so far this month are headed to China, while the majority of those from export terminals in the Baltic, Black Sea and Arctic are set for India, with Turkey a distant second.

Elsewhere, the European Union is working on a new package of sanctions aimed at targeting the shadow fleet of tankers that Russia uses to get its oil to market. Member states are still negotiating the details, which need to be approved unanimously by the bloc's 27 countries. The move comes as one of the group, Slovakia, is seeking to prolong a sanctions exemption without which it would no longer be able to sell fuels in the neighboring Czech Republic that are produced from Russian crude delivered to its refinery by pipeline.

Crude Shipments

A total of 26 tankers loaded 19.8 million barrels of Russian crude in the week to Nov. 17, vessel-tracking data and port-agent reports show. The volume was down sharply from a revised 24.98 million barrels on 32 ships the previous week.

Daily crude flows in the week to Nov. 17 slumped by about 740,000 barrels to 2.83 million, dropping to their lowest since the first seven days of July. The decline was driven by lower flows from the country's Baltic, Black Sea and Arctic ports, while shipments from the Pacific remained unchanged.

Less volatile four-week average flows also fell, dropping to average 3.28 million barrels a day, with a decrease of 150,000 from the period to Nov. 10. That's the biggest drop since late-July.

Crude shipments so far this year are about 50,000 barrels a day, or 1.5%, below the average for the whole of 2023.

One cargo of Kazakhstan's KEBCO crude was 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 December, after a planned easing of some output cuts was delayed for a second time.

Moscow 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.

Export Value

The Kremlin's oil income slumped with a decrease in weekly-average prices for Russia's major crude streams adding to the effect of the lower export volume. Together they pushed the gross value of Moscow's exports down by about $380 million to $1.25 billion in the week to Nov. 17. That's the lowest since January.

The price drop was in line with broader falls for oil, as concerns about demand growth once again came to the fore.

Export values at Baltic ports were down week-on-week by about $2.80 a barrel. Prices for Black Sea loading Urals dropped by about $2.70 a barrel and key Pacific grade ESPO fell by about $2.50, compared with the previous week. Delivered prices in India were down by about $2.40 a barrel, all according to numbers from Argus Media.

Four-week average income also fell, dropping to about $1.47 billion a week, from a revised $1.55 billion in the period to Nov. 10.

On this basis, the price of Russia's shipments from the Baltic in the four weeks to Nov. 17 was down by almost $0.50 a barrel from the period to Nov. 10. Prices for key Pacific grade ESPO were lower by about $0.30 a barrel.

Flows by Destination

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Observed shipments to Russia's Asian customers, including those showing no final destination, edged lower to 2.94 million barrels a day in the four weeks to Nov. 17.

About 1.3 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 1.15 million barrels a day, down from a revised 1.32 million for the period to Nov. 10 and 1.4 million in the four weeks to Nov. 3.

The Indian figures, in particular, are likely to rise as the discharge ports become clear for vessels that are not currently showing final destinations. Most of those heading from Russia's western ports through the Suez Canal end up in the south Asian nation.

The equivalent of about 320,000 barrels a day was on vessels signaling Port Said or Suez in Egypt. Those show up as "Unknown Asia" until a final destination becomes apparent.

The "Other Unknown" volumes, running at about 170,000 barrels a day in the four weeks to Nov. 17, 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.

Two Suezmax tankers, Sakarya and Cankiri, appear to have transferred their cargoes into a VLCC near the Spanish exclave of Ceuta. The VLCC Atila, which most likely received the barrels, is now heading around Africa toward Asia.

Separately, Greek naval exercises that have been running since May and have forced most ship-to-ship cargo transfers out of the Laconian Gulf and nearby waters, were extended for a sixth time and will now continue until mid-March.

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. Flows in the 28 days to Nov. 17 slipped back to about 340,000 barrels a day from the four-month high in the period to Nov. 10.

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, Nov. 26.

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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