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Russian oil product exports dropped by 20 percent last month, hitting the lowest level since May last year, BNE IntelliNews reported, citing data from S&P Global.
The February average was also 24% lower than the average pre-war level of oil product exports.
The data follows an earlier report that crude oil exports from Russia had remained relatively stable despite the pileup of sanctions, including an embargo on both oil and oil products in the European Union.
According to cargo tracking data from Kpler, Russian oil and fuel exports last month averaged 7.32 million barrels daily, almost unchanged from December before the fuel embargo kicked in.
What’s more, according to fresh research from the Institute of International Finance, Columbia University, and the University of California, Russia has been selling its crude oil at higher prices than the cap of $60 per barrel that the G7 in partnership with the EU imposed on those exports last year.
The average selling price for Russian crude, according to the researchers, has been $74 per barrel for the four weeks following the imposition of the crude oil export embargo by the EU on December 5.
Meanwhile, Russia has said it would reduce oil production by half a million barrels daily this month in response to sanctions, a move that may affect the level of its oil and fuel exports.
According to JP Morgan, Russian fuel exports could slip by 300,000 bpd as a result of the EU embargo but the bank added Russia could maintain production of crude oil at pre-war levels. It would be harder, however, to return to pre-pandemic levels of production, JP Morgan also said.
Pre-war production stood at 10.8 million bpd, while production rates before the pandemic averaged 11.3 million bpd, according to the bank.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
However, even if it proves correct, Russia is compensating by selling increasing volumes of crude to India and China who refine them and then sell them to the EU and the United States as their own.
The Western disinformation machine has never stopped churning out unsubstantiated claims and untruths about Russian oil exports, prices and budget deficits. Examples abound:
1- They claimed that Russia is selling its crude well below the Western price cap. They were proven wrong if not deliberately lying. Academics at the Institute of International Finance at Columbia University and the University of California found that based on their calculations Russia has been selling its crude oil at $74 a barrel well above the cap.
2- They claimed that the cap has led to a reduction in Russia’s exports of crude oil and petroleum products. Yet It Russia exported 8.2 million barrels a day (mbd) in January, 2.5% higher that its pre-Ukraine level of 8.0 mbd.
3- They claimed that Russian crude production is in decline. However, JPMorgan bank refuted this claim saying Russia can maintain its production at Pre-Ukraine level. Moreover, it stands to logic that if Russia managed to export on average 7.8 mbd in 2022 and even raised its exports in January 2023 to 8.2 mbd, then it is obvious that not only it can maintain its production but it can also raise it to 11.3 mbd.in 2023.
4- They claimed that Russia’s budget will show a huge deficit in 2022. Russia ended achieving a current account surplus of $228 bn and a trade balance surplus of $290 bn.
5- They also claimed that the Russian budget went into $24 bn deficit in January 2023 as a result of declining exports and prices. It was proven to be a plain lie since Russian exports were up while prices virtually maintain their levels.
6- They claimed Russia’s latest production cut shows its oil weapon is weakening only one day after the cut went into effect. Yet they never admitted that the price cap has failed miserably since it was launched almost three months ago despite rising Brent crude price by 19% since its launch, Russian oil exports breaking record in January 2023 and Russia selling its crude exports at prices at more than 23% higher than the cap.
7- They claimed that Russian fuel exports dropped by 24% in February but they refrained from mentioning the increasing volumes of Russian fuels being sold to Arab Gulf countries to replace oil and gas in electricity generation and desalination plants or the increasing volumes of Russian crude sold to China and India then refined and sold around the world as if they are their own.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert