Russia's Oil Revenues Rebound As Exports Surge To Three-Year High

Russia's crude oil and refined product exports surged in March to the highest level since April 2020, as fuel exports jumped, bringing $1 billion more to Putin's oil revenues last month compared to February, the International Energy Agency (IEA) said on Friday.  

Russian crude and product exports increased in March by 600,000 barrels per day (bpd), reaching 8.1 million bpd, the highest oil export levels from Russia in three years, the IEA said in its closely-watched Oil Market Report today.

A jump in product shipments accounted for most of the growth in export volumes, as product flows rebounded to levels last seen before Russia invaded Ukraine in February 2022.

Russia's fuel exports jumped by 450,000 bpd to 3.1 million bpd, the IEA said.

Oil export revenues are estimated to have rebounded by $1 billion from February levels to $12.7 billion in March. Yet, revenues were still 43% lower than a year ago due to the lower international prices and the wide discounts at which Russian oil trades relative to international benchmarks.

Russia has said it would reduce its oil production by 500,000 bpd until the end of the year. This week, Russia claimed it had cut its production by 700,000 bpd in March.

Tanker-tracking firms and analysts have said that Russia seems to have managed to divert a lot of its crude and fuel exports away from the EU and onto Asia, Africa, and Latin America.  

The bulk of Russia's crude is now going to China and India, while Africa and Latin America have become major outlets for Russia's gasoline and diesel exports. 

So far, tanker tracking suggests that Russia has been relatively successful in placing most of its fuels in markets other than Europe, even though Moscow has been forced to divert cargoes to distant markets to maintain export volumes, Gibson Shipbrokers said in a market report a month after the EU embargo on Russian fuels came into effect on February 5. 

"However, much depends on Russia's export strategy and ability to maintain refining runs and Western Governments' willingness to allow Russian products to be rebranded and re-exported overseas," Gibson noted.    

By Michael Kern for Oilprice.com

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