Russian Oil Exports Rebound, But Struggle To Find Buyers Outside Asia

Russia’s shipments of crude oil rebounded in the first full week of April to the highest level so far this year, although some cargoes are set on longer-than-usual voyages toward Asia, Bloomberg News’ tracker of crude leaving Russian ports showed on Monday.

In the week to April 8, outbound Russian crude averaged nearly 4 million barrels per day (bpd), the highest volume leaving Russian ports this year. While Russia is shipping out the highest level of crude cargoes since the start of the year, not all of the cargoes have final destination in their trackers and many of them are bound for long trips from European ports via South Africa en route to Asia, according to Bloomberg’s tanker-tracking data.

Russian shipments have rebounded from the previous two weeks of lower outbound volumes, the data showed. It also found that signs have started to emerge that traders are working to get more Russian crude to Asia, as many companies and countries in Europe are in a “self-sanction” mode and not willing to take Russian oil. For example, the northwestern European market for Russia’s flagship Urals crude grade is disappearing.

Before the Russian war in Ukraine, northwestern Europe was taking a lot of Urals from the Baltic ports of Primorsk and Ust-Luga.

Some of those shipments are now making their way to Asia, where buyers such as India and China aren’t shying away from Russian crude and are even benefiting from the record discounts at which Russian oil is being sold on the spot market relative to Dated Brent.

The voyage from Russia’s Baltic ports to Asia is much longer, but some traders and refiners appear to have concluded that the hefty discounts are worth it.

Asian buyers continue to buy one of Russia’s key crude grades shipped from the Far East ports as the Sokol cargoes for May loadings for Asia are already sold out, traders told Bloomberg last week.

Crude from the Sakhalin I project, from which operator ExxonMobil said it would withdraw after the Russian invasion of Ukraine, was sold either on a term or spot basis to South Korea, China, and India, Bloomberg’s sources said.

By Tsvetana Paraskova for Oilprice.com

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