(Bloomberg) — Russia’s weekly crude oil exports fell by the most in more than three months in the seven days to June 23, with maintenance at key ports also lowering the less volatile four-week average.
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Work in Primorsk on the Baltic Sea and Kozmino on the Pacific coast reduced shipments through Russia’s two busiest oil terminals, with no departures from either for four days a week. But flows should recover in the week to June 30, with loading already having resumed at both affected ports.
In addition, the ships on which Moscow depends to transport its oil are increasingly being targeted by Western authorities seeking to deplete the Kremlin’s war chest. The European Union is the latest to impose sanctions on specific ships, with its latest round of sanctions identifying 17 crude oil and refined products carriers and designating state-controlled shipping company Sovcomflot PJSC.
Three oil tankers recently approved by Britain gathered in the Baltic Sea, where two of them are part of loading programs for the ports of Primorsk and Ust-Luga. However, it’s unclear if they’ll actually take on freight, as one in the lineup already appears to have been replaced.
The decline in weekly export volumes was partially offset by a week-on-week increase in oil prices, which was particularly strong for shipments from western ports. As a result, the gross value of Russia’s crude oil shipments fell 14% in the seven days to June 23, compared with an 18% decline in shipments.
The moves come as Moscow continues to test the effectiveness of sanctions imposed in response to its February 2022 invasion of Ukraine. Three of 21 tankers owned by state-controlled Sovcomflot PJSC have now loaded cargoes of crude oil after have been silent for several months.
The first, the SCF Primorye, transferred its cargo to the Ocean Hermana while anchored in the Riau Archipelago east of Singapore. The cargo was then moved to a third vessel, identified as the VLCC Stellar Oracle, now called Saint Light, by TankerTrackers.com, which specializes in interpreting satellite images to track sanctions-evading tankers.
The second, the Bratsk, disappeared from automated tracking systems west of Sumatra on June 13 and at the time appeared to be headed for the Sunda Strait between the island and Java. Satellite images from Bloomberg suggest that it too is now anchored in the Riau Archipelago. The Belgorod, the third sanctioned tanker to load a cargo, was last seen near the southern tip of India on Monday.
Raw shipments
A total of 27 tankers loaded 21.29 million barrels of Russian crude in the week to June 23, ship data and port agent reports show. That was down sharply from 25.91 million barrels the week before.
Russian crude oil flows by sea fell by 660,000 barrels per day to 3.04 million in the week to June 23, the lowest in more than three months. The less volatile four-week average also fell, falling about 45,000 barrels per day to 3.37 million.
A week-on-week decline in supplies from Russia’s two main crude oil export ports – Primorsk on the Baltic Sea and Kozmino on the Pacific coast – was partly offset by more ships leaving Novorossiysk and the Arctic terminals in Murmansk.
The gap in Primorsk’s loading program, which will see no loads begin between June 18 and 22, suggests that a period of maintenance work was the reason for the cessation of flows from the port for most of the week. It is likely that work was also the cause of the lower shipments from Kozmino, as there had been no shipping activity in the port for several days. Flows from both ports are expected to recover in the coming week.
After nearly two months out of service, the Zaliv Vostok shuttle tanker arrived back on Sakhalin Island from a shipyard in China towards the end of the week, where it loaded a cargo on Sunday.
After last week’s slump, crude oil shipments so far this year are about 10,000 barrels per day above the 2023 average.
Russia ended its export targets at the end of May and opted to limit production, in line with its partners in the OPEC+ oil producer group. The country’s production target is set at 8.978 million barrels per day until the end of September. Thereafter, production is expected to increase by 39,000 barrels per day until September 2025, as long as market conditions allow.
No cargoes from the Kazakh KEBCO were loaded this week.
Flows by destination
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Asia
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Observed shipments to Russian Asian customers, including those with no final destination, fell back below 3 million barrels per day in the four weeks to June 23. Shipments averaged 2.96 million barrels per day in the period to June 23, from just over 3 million in the period to June 23. the period until June 16.
About 1.03 million barrels of crude oil per day were loaded onto tankers bound for China. The Asian country’s seaborne imports are boosted by about 800,000 barrels of crude oil per day, delivered by pipeline from Russia, either directly or via Kazakhstan.
Flows on ships signaling destinations in India averaged around 1.66 million barrels per day, unchanged from the revised figure for the period to June 16.
Both the Chinese and Indian figures are likely to rise as discharge ports become clear for ships that currently do not show final destinations.
The equivalent of about 250,000 barrels per day was on ships signaling Port Said or Suez in Egypt. These voyages typically end at ports in India or China and appear as ‘Unknown Asia’ until a final destination becomes clear.
The ‘Other Unknown’ volumes, which amount to around 30,000 barrels per day in the four weeks to June 23, come from tankers with no clear destination. Most come from Russia’s western ports and pass through the Suez Canal, but some could end up in Turkey. Others can be transferred from one ship to another, with the majority of such transfers now taking place in the Mediterranean, most recently off the coast of Morocco, or near Sohar in Oman.
Russian oil flows continue to be hampered by the Greek Navy conducting exercises in an area that has become synonymous with the transfer of the country’s crude oil. These activities have now been extended until July 15.
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Europe and Turkey
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Russian exports of crude oil by sea to European countries have stopped, while flows to Bulgaria stopped at the end of last year. Moscow also lost about 500,000 barrels per day in pipeline exports to Poland and Germany in early 2023, when those countries stopped purchasing.
Turkey is now the only short-haul market for shipments from Russia’s western ports, with flows stable at around 420,000 barrels per day in the 28 days to June 23.
Export value
The gross value of Russia’s crude oil exports fell from about $1.79 billion in the period to June 16 to $1.52 billion in the seven days to June 23. The decline in oil flows was partly offset by the largest week-on-week increase in prices for the Baltic states. crude oil loading since September.
Export values at Baltic and Black Sea ports rose by almost $5 per barrel week-on-week, while key Pacific grade ESPO rose by around $1.80 per barrel. Prices for delivered goods in India also rose, by about $4.70 per barrel, according to figures from Argus Media.
The four-week average income fell slightly, falling by about $6 million to $1.63 billion per week. The four-week average peak of $2.17 billion per week was reached in the period to June 19, 2022.
During the first four weeks after the Group of Seven countries’ price ceiling on Russia’s crude oil exports came into effect in early December 2022, the value of ocean flows fell to a low of $930 million per week, but soon recovered.
COMMENTS
This story is part of a weekly series tracking crude oil shipments from Russian export terminals and the gross value of those flows. The next update will be on Tuesday, July 2.
All figures exclude loads identified as Kazakhstan’s KEBCO grade. These are KazTransoil JSC shipments passing through Russia for export via Novorossiysk and Ust-Luga and are not subject to European Union sanctions or a price cap. The Kazakh barrels are mixed with crude oil of Russian origin to create a uniform export flow. Since the Russian invasion of Ukraine, Kazakhstan has renamed its cargoes to distinguish them from those shipped by Russian companies.
Ship tracking data is compared with reports from port agents and with 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 showing four-week average flows from Russia to major destinations.
–With help from Sherry Su.
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