Russia’s Crude Deliveries Plunge as US Sanctions Begin to Bite

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Nevertheless, some think the disruption will be temporary. “Down the line, you will see that more and more of the disrupted Russian oil, one way or another, finds its way to the market,” Gunvor Group Chief Executive Officer Torbjörn Törnqvist said in an interview on Tuesday. “It always does somehow.”

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Separately, Russia’s crude processing continued to climb in the final week of October, as plants increased runs after seasonal maintenance or Ukrainian drone strikes. But it is likely to fall again this week after another attack, the seventh so far this year, on Rosneft’s Saratov plant.

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Crude Shipments

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A total of 26 tankers loaded 21.11 million barrels of Russian crude in the week to Nov. 2, vessel-tracking data and port-agent reports show. The volume was down from a revised 26.41 million barrels on 34 ships the previous week.

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On a daily average basis, shipments in the week to Nov. 2 dropped to 3.02 million barrels a day, the lowest in 10 weeks. Separately, two cargoes of Kazakhstan’s Kebco grade were shipped from Ust-Luga and one from Novorossiysk during the week.

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Shipments were down from all regions, with De Kastri — linked to the Sakhalin 1 project —the only port to show stable flows.

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Export Value

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On a four-week average basis, the gross value of Moscow’s exports fell by about $90 million to $1.36 billion a week in the 28 days to Nov. 2, with export quantities and prices both falling.

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Using this measure, the export prices of Russia’s Urals from the Baltic and Black Sea both fell by about $0.60 a barrel to $51.42 and $51.79, respectively. The price of Pacific ESPO crude dropped by $0.80 to average $59.20 a barrel, remaining below the G-7 price cap of $60 for a second week. Delivered prices in India also dropped, falling by $0.60 to $62.13 a barrel, all according to numbers from Argus Media.

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On a weekly basis, the value of exports averaged about $1.15 billion in the 7 days to Nov. 2, down by 27% from the revised figure for the period to Oct. 26.

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Flows by Destination

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Observed shipments to Russia’s Asian customers, including those showing no final destination, slipped to 3.26 million barrels a day in the 28 days to Nov. 2, down from a revised 3.39 million barrels a day in the period to Oct. 26.

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While the amount of Russian crude heading to both China and India appears to be falling steeply, there are large quantities on vessels yet to show a final destination, allowing for that pattern to be reversed. Tankers are increasingly showing no final destination until they are well across the Arabian Sea, while some never show a final destination, even after mooring to discharge.

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Flows on tankers signaling Chinese ports fell to 970,000 barrels a day in the four weeks to Nov. 2, while the amount destined for India fell to 940,000 barrels a day from a revised 1.16 million barrels a day in the period to Oct. 26. But there is the equivalent of more than 1.3 million barrels a day on vessels yet to show a final destination.

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Of that, about 1.2 million barrels a day is on ships from Russia’s western ports showing their destination as Port Said or the Suez Canal, or those from Pacific ports with no clear delivery point, and a further 140,000 barrels a day is on tankers yet to signal a destination.

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In the past, those cargoes have almost all ended up in India or China, but tougher US sanctions may keep that oil on the water unless, or until, workarounds can be found by the Russian sellers.

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Flows to Turkey in the four weeks to Nov. 2 fell to about 320,000 barrels a day. Shipments to Syria remained at zero. Tankers hauling Russian crude to the east Mediterranean nation rarely signal their destination and usually disappear from automated tracking systems when they’re south of Crete, making it difficult to estimate flows in advance of ships arriving off the port of Banias.