Russia exported 4.822 million bpd of crude oil by sea in May, down from a record 5.21 million bpd in the previous month, energy data provider Kpler has said, adding that this is the first monthly decline in Russia’s crude oil exports this year—another tentative gleam of hope for oil bulls, after the Energy Information Administration yesterday reported a 2.5-million-barrel decline in crude oil inventories.
What’s more, Kpler says, this month should see another draw in Russian exports. The data provider sees them, based on loadings until now, at between 4.2 million and 4.4 million barrels daily. This, the company notes, is the lowest since August 2016.
Further falls are also likely: preliminary loadings data seen by Reuters suggests that loadings from Russian ports on the Baltic Sea are set for a decline in the first 12 days of July. The decline is seen at 300,000 tons of crude, bringing the total down to 2.1 million tons. Loadings from the Black Sea port of Novorossiysk are also set for a reduction, to 980,000 tons from 1.12 million tones for the first 12 days of June. Kpler confirmed the figures.
These data give a reason to hope that the production cut OPEC and Russia extended in May are having an impact on more than Saudi Arabia’s crude exports. But while maritime exports constitute a substantial part of Russian crude exports, the country also ships a lot of crude by pipelines, and there is no information yet about how these shipments looked last month.
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Last year, Russia was the world’s top crude oil exporter, shipping an average 8.6 million bpd, according to BP.
Even if pipeline exports in May also declined, chances are the effect of this information on international prices will be limited. The EIA yesterday said U.S. crude production grew last week, by 20,000 bpd to 9.35 million barrels daily. Added to earlier reports this week about Libyan output hitting 900,000 bpd, and to the reasonable possibility that the active rig count in the U.S. will rise for the 23rd straight week, this production increase entirely offset the effect of this week’s crude oil inventory draw. It is also likely to offset any sprouts of optimism resulting from the Russian export news.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.