Russia’s exports of oil products by sea slipped by 10.4% in February as the EU embargo and the G7 price caps on Russian fuels came into force, Reuters has estimated based on data from industry sources.
Total shipments of oil products from Russian ports dropped to 9.531 million tons last month, down from 11.781 million tons exported by sea in January, according to the data and to Reuters calculations.
The biggest decline was seen in seaborne exports from Russia’s Black Sea ports and from the Azov Sea, where volumes slumped by 20.5%. Part of the decline was due to harsh sea conditions and stormy weather, market sources told Reuters.
Oil product exports from the Baltic Sea ports in Russia went down by 4.1%, while exports from the Far East ports jumped by 18.9%. Still, Russia exports significantly less fuel from its Far East ports.
Ahead of the EU ban on Russian petroleum products, Russia began to divert its oil product cargoes to North Africa and Asia.
Russia is said to be accelerating its exports of diesel to Saudi Arabia by both direct shipments and ship-to-ship transfers, Reuters reported last week, quoting trade sources and shipping data from Refinitiv.
Using STS loadings, Russia is shortening the routes for tankers headed to Africa and Asia after Moscow is now banned from exporting fuels to the EU.
At the same time, Europe is ramping up imports of diesel from the Middle East and Asia to offset the loss of Russian barrels, of which it imported around 600,000 barrels per day (bpd) before the February 5 embargo took effect.
According to JP Morgan, Russian fuel exports could slip by 300,000 bpd as a result of the EU embargo, but the bank added that Russia could maintain its production of crude oil at pre-war levels. But it would be harder for Russia to return to pre-pandemic levels of crude production, JP Morgan added.
By Tsvetana Paraskova for Oilprice.com
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Russian diesel and other petroleum products are still reaching the EU as before via countries like Saudi Arabia and also China and India who are buying increasing volumes of Russian crude and having them refined and then exported to the EU and the United States despite existing bans on exports of Russian crude and petroleum products.
China and India alone are currently importing an estimated 4.0 million barrels a day (mbd) of Russian crudes (Urals and ESPO). When Turkey’s purchases and other Asian countries’ and Asian oil traders’ are added, it means that Russia has found new markets for virtually all its energy exports.
Moreover, Russia is selling its crude oil on average at $74 a barrel, $16 above the Western price cap according to a recent study by US researchers at the International Finance Centre at Columbia University and the University of California.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert