(Bloomberg) — Russia’s seaborne crude exports slipped back from a 13-week high in the seven days to Oct. 8, keeping four-week average flows in line with the export cut that Moscow pledged to maintain until the end of the year.
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About 3.23 million barrels a day of crude was shipped from Russian ports last week, a decline of about 490,000 barrels a day from the previous seven days, tanker-tracking data monitored by Bloomberg show. That reduced the less volatile four-week average to about 3.26 million barrels a day.The drop came after record-equaling shipments from the Arctic port of Murmansk in the previous week were not sustained.
Deputy Prime Minister Alexander Novak said in early August that Moscow would prolong export restrictions at a reduced level of 300,000 barrels a day below their May-June average until the end of the year. Bloomberg calculations indicate that shipments through ports should be running now at about 3.28 million barrels a day.
The dip in volumes dragged down the Kremlin’s weekly revenues from oil export duties, but the four-week average rose for a 10th straight week, setting a new high for the period since mid-January. Russia’s rising oil income has called into question the price cap imposed on its exports by the Group of Seven nations and European Union. One of the original architects of the plan suggested those countries need to crack down on Russia’s evasion of the limit and raise the price cap level, making it a painful but tolerable prospect for Moscow.
Russia has lifted its ban on overseas shipments of gasoline and diesel, introduced to tame surging pump prices at home. The measure has been replaced by punitive export tariffs imposed on so-called gray exporters of a wide range of petroleum products — companies that do not produce their own fuel but buy volumes domestically and re-sell abroad. Shipments resumed from the Baltic port of Primorsk over the weekend.
Russia’s oil refiners reduced daily processing rates in the first days of October to the lowest in 19 weeks as seasonal maintenance reaches its peak. That’s down by about 460,000 barrels a day, or 8%, from the high seen in July.
Flows by Destination
Russia’s seaborne crude flows edged lower in the period to Oct. 8 on a four-week average basis to 3.26 million barrels a day, down from 3.3 million barrels a day in the period to Oct. 1. Shipments remain about 580,000 barrels a day below the highs seen between April and June.
All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and the Baltic port of Ust-Luga.
The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies. Transit crude is specifically exempted from European Union sanctions.
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Observed shipments to Russia’s Asian customers, including those showing no final destination, edged higher to 2.79 million barrels a day in the four weeks to Oct. 8, from 2.76 million barrels a day in the period to Oct. 1. That’s still well below a peak of about 3.6 million barrels a day seen in the four weeks to May 14.
Even if all of the cargoes on ships without an initial destination eventually end up in India, shipments to the country will still be about 440,000 barrels a day, or 25%, down from their peak in May. Adding the “Unknown Asia” and “Other Unknown” volumes to the total for India gives a figure of 1.64 million barrels a day in the four weeks to Oct. 8. That’s the most in three months, but down from a high of 2.15 million barrels a day in the period to May 21.
The equivalent of 261,000 barrels a day was on vessels signaling Port Said or Suez in Egypt, or which are expected to be transferred from one ship to another off the South Korean port of Yeosu. Those voyages typically end at ports in India or China and show up in the chart below as “Unknown Asia” until a final destination becomes apparent.
The “Other Unknown” volumes, running at 336,000 barrels a day in the four weeks to Oct. 8, are those on tankers showing no clear destination. Most of those cargoes originate from Russia’s western ports and go on to transit the Suez Canal, but some could end up in Turkey. Others could be moved from one vessel to another, with most such transfers now taking place in the Mediterranean.
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Russia’s seaborne crude exports to European countries edged lower to about 160,000 barrels a day in the 28 days to Oct. 8, with Bulgaria the sole destination. These figures do not include shipments to Turkey.
A market that consumed about 1.5 million barrels a day of short-haul seaborne crude, coming from export terminals in the Baltic, Black Sea and Arctic has been lost almost completely, to be replaced by long-haul destinations in Asia that are much more costly and time-consuming to serve.
No Russian crude was shipped to northern European countries in the four weeks to Oct. 8.
Exports to Turkey, Russia’s only remaining Mediterranean customer, slipped to about 210,000 barrels a day in the four weeks to Oct. 8. Flows had topped 425,000 barrels a day in October, before falling sharply after a Group of Seven price cap came into effect in early December.
Flows to Bulgaria, now Russia’s only Black Sea market for crude, edged down to about 160,000 barrels a day, dropping from the highest levels seen since June 2022. High levels of imports in recent weeks have come despite lawmakers recently approving a motion to end Bulgaria’s dependence on Russian crude sooner than permitted under a European Union import ban.
Flows by Export Location
Aggregate flows of Russian crude fell back from the previous week’s three-month high to 3.23 million barrels a day in the seven days to Oct. 8. The drop of 490,000 barrels a day was the biggest since July and was driven by the scheduling of shipments from storage facilities at Murmansk.
Figures exclude volumes from Ust-Luga and Novorossiysk identified as Kazakhstan’s KEBCO grade.
Vessel-tracking data are cross-checked against port agent reports as well as flows and ship movements reported by other information providers including Kpler and Vortexa Ltd.
Inflows to the Kremlin’s war chest from its crude-export duty slipped to $74 million in the seven days to Oct. 8, while four-week average income edged up to $69 million. The four-week average set a new high for the period since mid-January. Rising oil prices and the rebound in flows are both contributing to the increase in receipts.
Russia’s government calculates oil taxes — including export duty — using a discount to global benchmark Brent, which sets the floor price for the nation’s crude for budget purposes. If Russian oil trades above that threshold, the Finance Ministry uses the market price for tax calculations, as has been the case in recent months. The discount used to calculate taxes including export duty is set at $20 a barrel for September and subsequent months.
The duty rate for October has been set at $3.26 a barrel, based on an average Urals price of $77.03 during the calculation period between Aug. 15 and Sept. 14. That was $11.60 a barrel below Brent over the same period. October’s duty rate sets a new high for the year.
The following charts show the number of ships leaving each export terminal and the destinations of crude cargoes from the four export regions.
A total of 29 tankers loaded 22.6 million barrels of Russian crude in the week to Oct. 8, vessel-tracking data and port agent reports show. That’s down 3.4 million barrels from the previous week.
A rebound in shipments from the Pacific port of De Kastri was more than offset by declines in flows from the Black Sea and the Arctic.
Destinations are based on where vessels signal they are heading at the time of writing, and some will almost certainly change as voyages progress. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade.
The total volume on ships loading Russian crude from the Baltic terminals was unchanged at 1.56 million barrels a day.
Shipments of Russian crude from Novorossiysk fell to a six-week low of about 330,000 barrels a day.
One cargo of Kazakh crude was loaded at the port during the week, up from none during the previous seven days.
One Aframax tanker completed loading cargoes at the Arctic port of Murmansk in the week to Oct. 8, cutting flows from their record-equaling levels during the previous seven days.
One tanker was entering Murmansk Fjord and two others were drifting outside the port waiting to load at the end of the week.
Twelve tankers loaded at Russia’s three Pacific export terminals, up by two from the previous week. The volume of crude shipped from the region recovered the loss seen the previous week.
The increase in flows was driven by a rebound in shipments of the Sokol grade from the terminal at De Kastri and one tanker completing loading of Sakhalin Blend crude. Shipments from the Sakhalin Island terminal are running at one every other week.
The volumes heading to unknown destinations are Sokol cargoes that are currently being shuttled to an area off the South Korean port of Yosu from the loading terminal at De Kastri. Most of these are ending up in India.
Note: This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the export duty revenues earned from them by the Russian government. Weeks run from Monday to Sunday. The next update will be on Tuesday, Oct. 17.
Note: All figures exclude cargoes owned by Kazakhstan’s KazTransOil JSC, which transit Russia and are shipped from Novorossiysk and Ust-Luga as KEBCO grade crude.
If you are reading this story on the Bloomberg terminal, click here for a link to a PDF file of four-week average flows from Russia to key destinations.
–With assistance from Sherry Su.
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