Russia Throws Caution to the Wind to Boost Oil Exports

With severe weather and U.S. and European sanctions hitting Russian oil exports, Moscow has reportedly eased restrictions to allow ports to operate during major storms in order to maintain the pace of exports. 

According to a Reuters report, traders interviewed said that there were both technical and environmental risks to the easing of restrictions at Russian ports in order to maintain export revenues. 

Reuters cited three unnamed traders as saying that Russian ports had been given “unofficial recommendations” to load even during a storm and to avoid excessive restrictions when faced with ice in order to ensure that more tankers can load at the ports. Trader testimony said that loadings had continued at a Novorossisk port even in the face of waves as high as three meters. 

Additionally, Reuters reported that ice class restrictions at Baltic ports had been eased due to a shortage of tankers as a result of Western sanctions. 

Despite the unofficial easing of restrictions, Reuters cited an ecology official as saying that Russia would not be easing requirements for oil loadings from ports “under the law”. 

Last week, 10 million barrels of Russian crude in 14 tankers were reportedly stranded off the coast of South Korea as a result of U.S. sanctions. The U.S. sanctioned multiple vessels and companies transporting Russia’s Sokol grade from its Sakhalin-1 project. The U.S. continues to attempt to restrict oil revenues for Moscow with sanctions and a G7 price cap implemented more than a year ago. 

Despite these efforts, Ukrainian economists estimated that Moscow would see $178 billion in oil revenues last year, while the Centre for Research on Energy and Clean Air estimates that the sanctions and price cap have so far cost Moscow’s budget $37 billion in export revenues.

By Charles Kennedy for Oilprice.com

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