Russia’s seaborne crude oil exports spiked to a five-month high last week as buyers scrambled to get their hands on as much cheap Russian crude oil as they could ahead of the sanctions that go into effect next month, according to Bloomberg.
Russia’s crude oil seaborne exports increased to 3.6 million barrels per day, Bloomberg said on Monday—the highest level since early June. Even the four-week average hit a high not seen since August of 3.18 million bpd. The figures include Russian oil only, and not Kazakhstan’s KEBCO.
Russia’s crude exports by sea to European countries—excluding Turkey--climbed to a six-week high in the four weeks to Nov 4, of 762,000 bpd—a 7% increase from the month prior.
Russia’s crude exports by sea to Mediterranean countries, including Turkey, rose slightly in the four-week period, while shipments to Bulgaria and Romania were unchanged at 167,000 bpd—roughly half what it was in June.
Russia’s crude exports by sea to Asia and vessels without a specified destination spiked in the four-week period to 2.067 million bpd—the highest level so far this year.
Russia’s export revenues rose by $16 million to $149 million in the week to November 4—Russia’s highest export revenue in five weeks.
On December 5, a ban on insuring and servicing ships carrying Russia’s seaborne crude oil will go into effect unless it is purchased at a price that falls below the designated price cap, to be set by the G7 nations and Australia, although the UK will issue waivers for Russian oil contracts if they were signed prior to December 5 and delivered prior to January 19.
The G7 has not yet set the price for the cap.
By Julianne Geiger for Oilprice.com
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The bulk of Russian oil exports will find its way to the Asia-Pacific region and the rest will most probably come back to the EU as Indian and Chines petroleum products refined from bought Russian crude.
However, the hapless EU will find it extremely hard to find alternatives and will, therefore, be forced to pay staggering prices for oil. It will be the ultimate loser with its economy heading towards de-industrialization with factories shutting down or downsizing or relocating outside Europe.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert