Russia’s offshore crude oil flows are rising with no sign of easing Ship’s crew

By Julian Lee (Bloomberg) —

Two months after Moscow threatened to cut oil production, there is no sign of a sustained slowdown in crude oil flows out of the country.

Russia’s exports surged back to over 4 million barrels a day in the week ended April 28, a level it has surpassed only once since its troops invaded Ukraine in February 2022, according to tanker tracking compiled by Bloomberg -Data. The flows remained practically unchanged on a four-week average.

Ocean currents still don’t reflect a production cut that the Department of Energy described as so large 700,000 barrels per day March. It also doesn’t appear that refinery runs in Russia have dropped much. The figures show that year-to-date processing rates were virtually flat, up 720,000 barrels per day in the first 19 days of April from the same full month last year.

Moscow has halted the release of crude oil and condensate production data, perhaps to make it harder to gauge whether it really has been cutting production ahead of cuts set to be implemented by several of its OPEC+ partners starting this month.

In a sign that it is short of cash To fund its war, the Kremlin is turning back to its oil industry, exploring options ranging from cutting fuel subsidies to an unexpected tax to boost budget revenues. Meanwhile, President Vladimir Putin has exempted oil supplies under existing contracts to so-called friendly nations from an export ban designed to halt supplies to foreign buyers who adhere to a price cap imposed by the Group of Seven.

The diversion of crude oil previously delivered to Poland and Germany via the Druzhba pipeline has boosted sea shipments to an average of 3.32 million barrels per day earlier this year, compared with 2.94 million barrels per day at the corresponding period-end 2020 2022. Deliveries to Germany stopped at the end of 2022 and deliveries to Poland stopped at the end of February. Poland’s state-controlled oil refiner PKN Orlen SA has canceled its latest contract with a Russian supplier in response to the halt to oil supplies via Druzhba.

Russia’s lifelines

Combined crude oil volume on ships bound for China and India, as well as smaller flows to Turkey and volumes on ships that have not yet announced a final destination, rose for a third week to a record 3.39 million barrels per day in the past four-week period .

As the ultimate destinations of the cargoes became apparent in late January, flows into China surged to new post-invasion highs and remained near those levels through February. Historical patterns suggest that most ships currently identified as “Unknown Asia” destinations bound for the Suez Canal will land in India, while those targeting very large crude oil vessels off the north coast of Morocco or, more recently, in the Atlantic be loaded Ocean, will travel to China.

Ship-to-ship transfer operations in very large crude oil carriers have shifted from Mediterranean waters off the Spanish North African city of Ceuta to the Atlantic, as they did last summer.

The Aframax tankers Nurkez and Crius transhipped their cargo in VLCCs in the Atlantic off the Canary Islands last week.

At least 62 cargoes, or 44.7 million barrels, have been transhipped between ships at those two locations and off the Greek coast near Kalamata since the beginning of the year.

Russia and India are discussing the establishment of joint reinsurance institutions for oil transportation, according to Russian Deputy Prime Minister Denis Manturov, who did not rule out such organizations could emerge by the end of the year. Deputy Prime Minister Alexander Novak said Russia needs new insurance and reinsurance mechanisms for its oil exports.

Until recently, the country was silent rely on Western insurers to cover more than half of the tanker fleet that exports their oil. But one of the oil tanker companies heavily involved in transporting Russian oil did it lost industry standard insurance for its fleet after violating a Group of Seven price cap related to transporting the nation’s casks.

Crude oil flows by destination

Crude oil flows rose about 680,000 barrels per day to 4.08 million barrels per day in the week ended April 28 from the previous week. On a four-week average, total seaborne exports were little changed, falling 12,000 barrels per day to 3.45 million barrels per day, from a 10-month high.

Volatile weekly data is affected by tanker disposition and weather-related loading delays. Port maintenance can also interrupt export for several days at a time.

All figures exclude loads identified as Kazakhstan’s KEBCO grade. These are deliveries from KazTransoil JSC passing through Russia for export through the Baltic ports of Ust-Luga and Novorossiysk.

The Kazakh casks are blended with Russian-origin crude oil to create a uniform export quality. Since the Russian invasion of Ukraine, Kazakhstan has renamed its cargoes to distinguish them from those shipped by Russian companies. Transit crude is specifically exempt from European Union sanctions.


Average four-week deliveries to Russia’s Asian customers, plus those on vessels that have no final destination, fell to 3.25 million barrels a day in the period ended April 28. That’s just 30,000 barrels per day through April 21st.

While volumes shipped to China and India appear to have declined since recent highs, history shows that most cargo on ships with no original destination eventually ends up in one or the other of these countries.

The equivalent of 720,000 barrels per day was on ships bound for either Port Said or Suez in Egypt, or which had already been, or are expected to be, transferred from one vessel to another off the South Korean port of Yeosu. These voyages typically terminate in ports in India or China and are shown in the table below as “Unknown Asia” until a final destination becomes apparent.

The “Other Unknown” volumes running at 386,000 barrels per day for the four weeks ended April 28 are those on tankers that have a destination of Ceuta, Kalamata or no destination at all. Most of these cargoes pass through the Suez Canal, but some could end up in Turkey. An increasing number of ships are transhipped from one ship to another in the Mediterranean or, more recently, in the Atlantic for onward voyages to Asia.


Russia’s sea crude exports to European countries fell to 63,000 barrels a day in the 28 days ended April 28, with Bulgaria as the only destination. Deliveries to Turkey are not included in these figures.

A market that consumed more than 1.5 million barrels a day of short-haul crude oil sourced from export terminals in the Baltic, Black Sea and Arctic has been almost completely lost, replaced by far more expensive and time-consuming long-haul destinations in Asia .

In the four weeks ended April 28, no Russian crude was shipped to northern European countries.

Exports to Turkey, Russia’s only remaining Mediterranean buyer, rose to 140,000 barrels a day in the four weeks ended April 28, recovering nearly two-thirds of the previous week’s decline.

Flows into Bulgaria, now Russia’s only Black Sea market for crude, fell to 63,000 barrels a day, the lowest level since early 2022, when Bloomberg began compiling flows in detail.

Flows by export location

Total Russian crude oil flows rose to 4.08 million barrels per day in the seven days ended April 28, surpassing 4 million barrels per day for only the second time since early 2022. Shipments from the Baltic, Black Sea and Pacific were all higher, with currents from the Arctic flat from the previous week.

Figures exclude quantities from Ust-Luga and Novorossiysk identified as Kazakhstan’s KEBCO content.

export earnings

Flows into the Kremlin’s war chest from its crude oil export tariffs rose by $9 million to $56 million in the seven days ended April 28, while the median four-week earnings were flat at $47 million.

President Vladimir Putin has signed another amendment to the law on the tax assessment of oil prices in Russia. From June, export duty rates will be calculated in the same way as those for the mineral extraction tax and the oil company profit tax, using a decreasing discount on prevailing Brent prices instead of estimates for Ural crude. The export tariff, which will expire in late 2023, is based on a reference export price $28 a barrel below Brent, with the rebate dropping to $25 in July and remaining at that level through the end of the year.

The April tariff was set at $1.95 per barrel, little changed from March, based on an Urals price of $50.80 per barrel during the February 15-March 14 assessment period. The rate for May is $1.96 per barrel at an Ural price of $51.15 per barrel between March 15th and April 14th.

origin-to-place flows

The charts below show the number of ships leaving each export terminal and the destinations of crude oil shipments from the four export regions.

A total of 37 tankers loaded 28.5 million barrels of Russian crude in the week ended April 281, ship tracking data and port agent reports show. That’s up 4.7 million barrels, or 20%. Destinations are based on where the ships are signaling to at the time of writing, and some will almost certainly change as the voyage progresses. All figures exclude loads identified as Kazakhstan’s KEBCO grade.

Total volume on ships loading Russian crude from Baltic terminals rose to a four-week high of 1.77 million barrels per day.

Shipments of Russian crude from Novorossiysk in the Black Sea rose to an 11-month high, with flows rising to 772,000 barrels per day. No Kazakh crude oil was loaded at the port during the week.

Arctic deliveries were flat at 286,000 barrels per day, with two Suezmax tankers loading in the week ended April 28.

Flows from the Pacific surged to a six-week high, with 12 tankers loaded at the region’s three export terminals in the week ended April 28, up from 11 the previous week.

Eight shipments of ESPO crude out of 10 loaded during the week are on ships bound for China. One is en route to India while the other indicates its destination as Tanjung Pelepas in Malaysia. Previous shipments that went there from Kozmino ended up going on to India.

The remaining volumes en route to unknown destinations are Sokol cargoes that were recently transhipped to other ships at Yeosu or are currently being shipped from the De Kastri loading terminal to an area outside the South Korean port. Most of them also end up in India.

Note: All figures exclude KazTransOil JSC cargoes from Kazakhstan transiting Russia and shipped from Novorossiysk and Ust-Luga as KEBCO grade crude oil.

–With support from Sherry Su.

© 2023 Bloomberg LP

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