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Seaborne crude oil exports out of Russia have dropped by 900,000 barrels per day (bpd) in the past two weeks compared to the last week of August, according to estimates by Bloomberg.
A storm in the Pacific and an unexplained drop in cargo shipments from the Baltic Sea were the two key reasons for the plunge in Russian crude oil exports by sea in the first half of September.
According to Bloomberg’s estimates, Russian crude exports by sea averaged 2.54 million bpd in the week to September 16. This was down by nearly 900,000 bpd compared to the estimated shipments of 3.42 million bpd in the week to September 2.
According to Bloomberg, the four-week moving average suggests that Russian crude oil exports dipped below the 3 million bpd mark for the first time in over five months.
Lower overall shipments mean lower revenue for Putin, and this revenue will further decline as of October because of 15% lower export duty rates on crude. Bloomberg notes that Russia’s per-barrel income would be the lowest since February 2021 if the reduced exports trend holds
In the first six months of the war it started in Ukraine, Russia earned $157 billion (158 billion euros) in revenue from fossil fuel exports, according to the Finland-based think-tank Centre for Research on Energy and Clean Air (CREA). The EU imported 54% of this, worth approximately $84.7 billion (85 billion euros).
Up until August, total Russian oil exports were quite resilient and just 400,000 bpd below the pre-war levels, according to the International Energy Agency (IEA). But the global oil market will have to prepare itself for a loss of 2.4 million bpd supply when the EU embargo kicks in; an additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes, the IEA said last week.
Going forward, the EU and the G7 hope to keep Russian oil flows coming with a price cap that would allow maritime transportation services for Russia’s oil if that oil is sold at or below a certain price. Yet, Putin can simply make good on his promise to halt all energy supply—including crude, fuels, natural gas, and coal—to the countries that sign up to cap the price of Russian oil.
By Josh Owens for Oilprice.com
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Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and…