(Bloomberg) -- Russia’s seaborne crude shipments fell to the lowest in more than a month as high winds at the Pacific port of Kozmino disrupted cargoes in the first days of March.

Gusts up to 48 miles an hour prevented tankers from mooring at the terminal that ships the country’s ESPO crude during the first two days of the month, cutting flows by 40% over the week as a whole. That more than offset the restart of exports of Sokol crude from the De Kastri terminal 700 miles north.

The drop came just as Moscow undertook to bear down on production as part of its renewed commitment to the OPEC+ alliance’s attempts to avert a global surplus and shore up prices. Russia — which has a unique exemption to split its curbs between output and exports of crude oil and refined products — will put a greater emphasis on cuts to crude production in the coming quarter, Deputy Prime Minister Alexander Novak said.

Flows in the week to March 3 slumped by about 720,000 barrels a day to 2.78 million. Weather-data provider Visual Crossing showed wind speeds at Nakhodka, located across Nakhodka Gulf from Kozmino, peaking on March 1, with the first tanker only moving onto the terminal the following afternoon. 

The temporary absence of Sokol cargoes stemmed from a lack of the specialized shuttle tankers needed to move the grade from De Kastri amid issues with deliveries to Indian refiners. Moscow has struggled since December to get Sokol into India, its main market, with the Asian nation’s refiners wary of US sanctions and complaining that the supplies are too expensive.

The first shipments of Sokol in about 10 days left De Kastri at the end of February. Several cargoes have been delivered to China, with more transferred onto other ships for storage, allowing the shuttle tankers to return to De Kastri and begin loading new cargoes. Flows to Indian refiners remain at a trickle though, with 12 million barrels still on tankers idling in the East China Sea, or anchored near China’s ports.

A first Sokol cargo is anchored of Pakistan’s port of Karachi.

Russia’s ability to ship its crude may be hampered in the months ahead after the US Treasury slapped sanctions on 14 tankers owned by Sovcomflot, the Russian state tanker company. None of the five tankers that were empty or discharging when the sanctions were imposed has subsequently loaded another cargo. Earlier sanctions forced a chunk of the vast fleet of tankers that Russia uses to deliver its crude oil to grind to a halt.

The gross value of Russia’s crude exports dropped to a five-week low, falling to $1.37 billion in the seven days to March 3 from $1.73 billion the previous week. Meanwhile four-week average income also fell sharply, down by $110 million to $1.58 billion a week.

Flows by Destination

Russia’s seaborne crude flows in the week to March 3 at 2.78 million barrels a day were the lowest in five weeks. The less volatile four-week average also dropped, down by about 230,000 barrels a day to 3.22 million barrels a day.

Weekly shipments were about 810,000 barrels a day below the average seen in May and June, or about 510,000 barrels a day below Russia’s first quarter target. The four-week average was about 60,000 barrels a day below the target.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through the Black Sea port of Novorossiysk and the Baltic’s Ust-Luga and are not subject to European Union sanctions or a price cap.

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.

  • Asia

Observed shipments to Russia’s Asian customers, including those showing no final destination, fell to a 10-week low of 2.81 million barrels a day in the four weeks to March 3, down from a revised 3.02 million in the previous four-week period.

About 1.31 million barrels a day of crude was loaded onto tankers heading to China. The Asian nation’s seaborne imports are boosted by about 800,000 barrels a day of crude delivered from Russia by pipeline, either directly, or via Kazakhstan. 

Flows on ships signaling destinations in India averaged about 970,000 barrels a day.

Both the Chinese and Indian figures will rise as the discharge ports become clear for vessels that are not currently showing final destinations.

The equivalent of about 400,000 barrels a day was on vessels signaling Port Said or Suez in Egypt, or 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. This figure includes the Sokol crude still on shuttle tankers awaiting transfer to other vessels as well as the other stranded cargoes of the grade.

The “Other Unknown” volumes, running at about 130,000 barrels a day in the four weeks to March 3, 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, off the coast of Greece.

Europe and Turkey

Russia’s seaborne crude exports to European countries have ceased.

With flows to Bulgaria halted at the end of last year, Turkey is now the only short-haul market for shipments from Russia’s western ports.

Exports to Turkey stood at about 417,000 barrels a day in the four weeks to March 3. That’s the highest since the week ended Dec. 5 and up from a revised figure of about 390,000 barrels a day in the period to Feb. 25.

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.

Export Value

Following the abolition of export duty on Russian crude, we have begun to track the gross value of seaborne crude exports, using Argus Media price data and our own tanker tracking.

The gross value of Russia’s crude exports dropped to a five-week low, falling to $1.37 billion in the seven days to March 3 from $1.73 billion the previous week. Meanwhile four-week average income fell sharply, down by $110 million to $1.58 billion a week. The four-week average is still well off its peak of $2.17 billion a week, reached in the period to June 19, 2022. The highest it reached last year was $2 billion a week in the period to Oct. 22.

During the first four weeks after the Group of Seven nations’ price cap on Russian crude exports came into effect in early December 2022, the value of seaborne flows fell to a low of $930 million a week, but soon recovered.

The chart above shows a gross value of Russia’s seaborne oil exports on a weekly and four-week average basis. The value is calculated by multiplying the average weekly crude price from Argus Media Group by the weekly export flow from each port. For shipments from the Baltic and Arctic ports we use the Urals FOB Primorsk dated, London close, midpoint price. For shipments from the Black Sea we use the Urals Med Aframax FOB Novorossiysk dated, London close, midpoint price. For Pacific shipments we use the ESPO blend FOB Kozmino prompt, Singapore close, midpoint price.

Export duty was abolished at the end of 2023 as part of Russia’s long-running tax reform plans.

Ships Leaving Russian Ports

The following table shows the number of ships leaving each export terminal.

A total of 28 tankers loaded 19.4 million barrels of Russian crude in the week to March 3, vessel-tracking data and port agent reports show. That was down by about 5.1 million barrels from the previous week and the lowest in five weeks.

Shipments from Russia’s Pacific terminal at Kozmino were hit by strong winds at the start of March, but shipments resumed from De Kastri after the shuttle tankers used there offloaded cargoes in China.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. One cargo of KEBCO was loaded at Ust-Luga and one at Novorossiysk during the week.

NOTES

Note: This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. Weeks run from Monday to Sunday. The next update will be on Tuesday, March 12. 

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.

©2024 Bloomberg L.P.