Russian Crude Exports Rise by 70,000 Barrels/Day, Ending Five-Week Decline

Key Takeaway

• Russia's four-week average crude exports rose by 70,000 barrels a day to 3.34 million, ending a five-week decline.
• Despite increased shipments, the gross value of Russian crude exports only rose by 4% due to falling oil prices.
• Sanctioned Russian tankers are still active; Sovcomflot PJSC renamed 11 of its ships to bypass G7-led price caps.

Russian Crude Exports Rebound

Russia's four-week average crude exports saw an uptick in the period leading to June 9, ending a streak of declines. The average rose by 70,000 barrels per day, reaching 3.34 million barrels per day, marking the first increase in five weeks. This follows a cumulative cut of 390,000 barrels per day, or 11%, over the previous four weeks, the largest reduction since November. The recent gain was driven by a surge in weekly shipments to a five-week high. Despite this increase, overseas crude flows have been below year-earlier levels since late April, with the gap widening to as much as half a million barrels per day before the latest uptick.

Moscow has pledged to compensate for exceeding its April output target, attributing the overproduction to "technicalities" in achieving significant cuts. However, despite making the deepest reductions in over a year, Russia still pumped above its promised level last month. The increase in weekly export volumes was tempered by a sharp week-on-week drop in oil prices following the announcement of a gradual easing of some OPEC+ output restrictions from October, limiting the gross value increase of Russia's shipments to just 4% in the seven days to June 9.

Seaborne Crude Shipments

Russia's seaborne crude flows rose by 10% to 3.53 million barrels per day in the week to June 9. A total of 32 tankers loaded 24.72 million barrels of Russian crude, up from 22.53 million barrels the previous week. The increase in shipments from the Black Sea port of Novorossiysk and the Pacific ports of Kozmino and De Kastri was partly offset by fewer departures from the Baltic Sea, Arctic terminals at Murmansk, and the Sakhalin Island terminal of Prigorodnoye.

Two shuttle tankers used to haul crude from Russia’s Sakhalin-2 project have failed to move cargoes since April, putting the entire burden of shipments on a single vessel. Unless at least one of them is brought back into service soon, the Sakhalin-2 project will struggle to maintain its normal rate of three to four cargoes a month. Crude shipments so far this year are running about 10,000 barrels per day above the average for 2023.

Flows by Destination

Shipments to Russia’s Asian customers, including those showing no final destination, rebounded to 3 million barrels per day in the four weeks to June 9, up from 2.93 million in the previous four-week period. About 1.24 million barrels per day were loaded onto tankers heading to China, with an additional 800,000 barrels per day delivered via pipeline. Flows to India averaged about 1.43 million barrels per day, compared to a revised 1.63 million barrels per day in the period to June 2. Both figures are likely to rise as the discharge ports become clear for vessels not currently showing final destinations.

The equivalent of about 285,000 barrels per day was on vessels signaling Port Said or Suez in Egypt, typically ending at ports in India or China. The “Other Unknown” volumes, running at about 50,000 barrels per day, are on tankers showing no clear destination, with most originating from Russia’s western ports and transiting the Suez Canal. Some could end up in Turkey or be transferred from one vessel to another, with most such transfers now taking place in the Mediterranean or off Morocco.