Russia’s Oil Exports Plummet Amid US Sanctions on Major Asian Markets
Russia’s seaborne crude shipments experienced a significant decline, marking the largest drop since January 2024, as the latest US sanctions prompted major buyers to distance themselves from Moscow’s oil. Cargo discharges have faced even greater challenges than loadings, as oil on the water has surged. According to vessel-tracking data compiled, the four-week average volumes from the country’s ports were 3.58 million barrels a day to Nov. 2, reflecting a decrease of approximately 190,000 from the revised figure for the period ending Oct. 26. The average offers a more precise view of the underlying trends compared to the more erratic weekly figures, which also declined. The decline in flows has impacted Moscow’s oil revenue, which has dropped to its lowest level since August, following a US ban on transactions with the nation’s two largest exporters, Rosneft PJSC and Lukoil PJSC. Refiners in China, India, and Turkey are currently halting purchases of sanctioned cargoes and exploring alternative supplies.
Russian exporters persist in loading crude onto tankers; however, refiners exhibit a diminished willingness to accept the cargoes into their storage tanks. The volume of Russian crude at sea has surged to over 380 million barrels, an increase of 27 million barrels, or 8 percent, since the beginning of September. Together, India, China, and Turkey account for over 95 percent of Russia’s seaborne crude exports, making it nearly impossible to offset any substantial reduction in their purchases. Moscow is expected to persist in loading cargoes for as long as possible, even if they are kept in floating storage. Oil held at sea will increasingly serve as a significant indicator of the effects of the latest sanctions. The prohibition on transactions with Russian firms, now encompassing its four largest crude exporters, is set to impact global oil supplies, the chief executives of major European oil companies cautioned, potentially diminishing the extent of any surplus in the coming year. Several large Indian oil refiners, who have been buying almost 1 million barrels a day of Russian crude, are pausing purchases, at least until workarounds can be found. Deliveries for December and January are anticipated to be impacted, with crude expected to start loading at Russian ports this month. India’s state-run refiners are evaluating the possibility of sourcing certain cargoes from smaller suppliers rather than relying on Russia’s sanctioned energy giants.
Chinese refiners are implementing comparable measures. State-owned processors Sinopec and PetroChina Co. have canceled certain Russian cargoes in light of the US sanctions, with the buyers’ caution potentially impacting as much as 45 percent of China’s overall seaborne crude imports from Russia, equating to approximately 400,000 barrels a day, as per reports. The action may impact Russia’s essential ESPO grade, transported from the Pacific port of Kozmino, located only a few days’ sailing distance from refineries in northern China. Refiners in Turkey, recognized as the third-largest buyer of Russian crude, have begun to reduce their purchases. They are actively seeking alternative supplies from other nearby suppliers, including Iraq, Libya, Saudi Arabia, and Kazakhstan. Nonetheless, there are those who believe the disruption will be short-lived. “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,” Torbjörn Törnqvist stated in an interview on Tuesday. “It always does somehow.” In a separate development, Russia’s crude processing saw an uptick in the final week of October, as plants ramped up operations following seasonal maintenance or Ukrainian drone strikes. However, it is expected to decline once more this week following yet another assault, the seventh of the year, on Rosneft’s Saratov facility.
A total of 26 tankers loaded 21.11 million barrels of Russian crude in the week ending Nov. 2, according to vessel-tracking data and reports. The volume decreased from a revised 26.41 million barrels across 34 ships the prior week. During the week leading up to Nov. 2, daily shipments fell to 3.02 million barrels per day, marking the lowest level in 10 weeks. In a separate development, two cargoes of Kazakhstan’s Kebco grade were dispatched from Ust-Luga, along with one from Novorossiysk during the week. Shipments decreased across all regions, with De Kastri — associated with the Sakhalin 1 project – being the sole port to exhibit stable flows. Over a four-week average, the gross value of Moscow’s exports decreased by approximately $90 million, reaching $1.36 billion per week in the 28 days leading up to Nov. 2, as both export quantities and prices declined. According to this measure, the export prices of Russia’s Urals from the Baltic and Black Sea both decreased by approximately $0.60 a barrel, reaching $51.42 and $51.79, respectively. The price of Pacific ESPO crude decreased by $0.80, averaging $59.20 a barrel, and continues to stay below the G-7 price cap of $60 for a second consecutive week. In India, delivered prices experienced a decline, decreasing by $0.60 to reach $62.13 a barrel, as reported by Argus Media. In the week leading up to November 2, the average value of exports was approximately $1.15 billion, reflecting a decline of 27 percent from the revised figure for the week ending October 26.
Shipments to Russia’s Asian customers, including those without a specified final destination, decreased to 3.26 million barrels a day in the 28 days leading up to Nov. 2, down from a revised 3.39 million barrels a day in the period ending Oct. 26. Although the volume of Russian crude oil being transported to China and India seems to be declining significantly, there are substantial amounts on ships that have yet to disclose their final destinations, which could potentially alter this trend. Tankers are increasingly displaying no final destination until they are well across the Arabian Sea, with some never indicating a final destination, even after mooring to discharge. Flows on tankers signaling Chinese ports decreased to 970,000 barrels a day in the four weeks leading up to Nov. 2, while the volume headed for India dropped to 940,000 barrels a day from a revised 1.16 million barrels a day during the period ending Oct. 26. However, there exists the equivalent of over 1.3 million barrels per day on vessels that have yet to disclose a final destination. Approximately 1.2 million barrels per day are currently aboard vessels departing from Russia’s western ports, with their destinations listed as Port Said or the Suez Canal. Additionally, there are shipments from Pacific ports lacking a defined delivery point, alongside another 140,000 barrels per day on tankers that have yet to indicate a destination. Historically, those cargoes have predominantly reached India or China; however, the implementation of stricter US sanctions may result in that oil remaining at sea, unless or until Russian sellers can identify alternative solutions.
In the four weeks leading up to November 2, flows to Turkey decreased to approximately 320,000 barrels per day. Shipments to Syria have consistently been recorded at zero. Tankers transporting Russian crude to the eastern Mediterranean nation seldom indicate their destination and typically vanish from automated tracking systems when they are south of Crete, complicating efforts to predict the flow of ships arriving at the port of Banias. This narrative is a component of a weekly series that monitors the shipments of crude oil from Russian export terminals and assesses the overall value of these transactions. The forthcoming update is scheduled for Tuesday, November 11. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. These shipments are conducted by KazTransoil JSC, transiting through Russia for export via Novorossiysk and Ust-Luga, and they are not affected by European Union sanctions or a price cap. The Kazakh barrels are mixed with crude from Russia to produce a consistent export stream. In the wake of Russia’s invasion of Ukraine, Kazakhstan has taken steps to rebrand its cargoes, ensuring they are clearly differentiated from those transported by Russian companies. Vessel-tracking data undergo rigorous cross-checking with port-agent reports, alongside flows and ship movements documented by various information providers such as Kpler and Vortexa Ltd., in addition to satellite imagery that encompasses Russian ports.
