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Russian revenues from oil fell in February as exports declined after the EU embargo on oil product imports from Russia by sea, the International Energy Agency (IEA) said on Wednesday.
Last month, Russia’s total oil exports dropped by 500,000 barrels per day (bpd) to 7.5 million bpd as the EU embargo on refined oil products came into effect, the agency said in its Oil Market Report for March.
“Revenues are already dwindling,” the IEA noted, adding that Russia’s estimated oil export revenues fell to $11.6 billion in February, down by $2.7 billion from January when volumes were significantly higher, and nearly half pre-war levels.
“Russian fiscal receipts from oil sales were up 22% from January after export taxation rules were adjusted, but at $6.9 bn, just 45% of the level from a year earlier, according to the Russian finance ministry,” the IEA said.
Russian shipments to the EU plunged by 800,000 bpd to 600,000 bpd, compared with more than 4 million bpd at the start of 2022. Shipments to China and India also fell, while cargoes without a destination surged by 600,000 bpd to 800,000 bpd, per the IEA estimates.
“It remains to be seen if there will be sufficient appetite for Russian oil products now that the price cap is in place or if its production will start to fall under the weight of sanctions,” the agency said.
In the global oil market, supply is currently outstripping “still-lacklustre demand,” and stocks have built to levels not seen in 18 months, according to the IEA.
“Much of the supply overhang reflects ample Russian barrels racing to re-route to new destinations under the full force of EU embargoes.”
“The G-7 sanctions regime has been effective in not restricting global crude and product supplies, while simultaneously curtailing Russia’s ability to generate export revenue,” the IEA said in the report.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Despite unprecedented sanctions, bans and an oil price cap, Russia achieved in 2022 an export average of 7.8 million barrels a day (mbd) of crude and petroleum products, a current account surplus of $228 bn and a trade balance surplus of $290 bn.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert