Russian oil product exports in January slipped 7% month on month in January, according to tanker tracking data, as poor weather and a surge in Ukrainian attacks on key Russian energy targets took their toll on Moscow’s key trade flows.
Fuel and feedstock exports from Russian ports averaged 2.4 million b/d during the first month of 2024, with the biggest falls seen in fuel oil, vacuum gasoil and naphtha, according to S&P Global Commodities at Sea data.
Crude and product exports from Russia’s major Baltic Sea port of Ust-Luga saw the biggest slide, with product flows down 150,000 b/d and crude loadings 90,000 b/d lower month on month, the data shows. Novatek’s Ust-Luga condensate processing terminal was damaged in a Jan. 21 strike from a suspected Ukrainian drone. Although loadings have since resumed at the plant’s terminal, it remains unclear how much capacity remains offline due to the attack.
Ukraine has launched a fresh offensive against Russia’s fuels and oil export infrastructure this year, many of which have come from a new breed of long-distance drones.
Exports from the Black Sea port of Tuapse, however, rose by almost 30,000 b/d month on month to average 226,000 b/d, despite a Jan. 25 drone attack on Rosneft’s 240,000 b/d Tuapse refinery that damaged the plant’s vacuum distillation unit.
Poor weather also hampered oil loadings at Russia’s biggest Back Sea oil port of Novorossiisk, with crude and product exports down 25,000 b/d and 45,000 b/d, respectively, month on month, according to the data.
Fuel exports to Brazil, which absorbed record flows of 281,000 b/d of Russian fuels in December, fell sharply in January. At the same time, offshore ship-to-ship transfers of fuels — which often end up with Russia’s main oil-buying customers in Asia and Turkey — rose sharply month on month to 340,000 b/d, a significant rebound from a recent slump to 82,000 b/d in November, when the US and EU tightened enforcement on sanctions-dodging tankers.
The cost of shipping Russian crude remained relatively stable in January, down from a recent spike due to tougher enforcement of the G7’s “price cap” on Russian oil exports, pricing data suggests. The discount for Russia’s key Urals export crude loading from Primorsk versus the Mediterranean Dated Strip stood at minus $17.5/b on Feb. 1, from minus $12/b in late October when Platts assessed it at its tightest margin since Russia invaded Ukraine. Platts is part of S&P Global.
Red Sea impact
Meanwhile, Russian seaborne crude exports during January remained little changed month on month at 3.39 million b/d, the data shows. Combined, Russian seaborne oil exports in the month averaged 5.79 million b/d, slightly below pre-war levels of 5.9 million b/d.
Flows to India, Russia’s biggest buyer of seaborne crude, fell by 200,000 b/d month on month to 1.28 million b/d, further evidence of a push by Indian refiners to diversity their crude slates away from cheap Russian barrels, which surged to almost 2 million b/d last year. Rising costs of Russian crude and an ongoing currency payment issues for Russian crude by Indian refiners have also hampered oil flows into the country.
With growing volumes of oil and other seaborne commodities avoiding the Red Sea over the risk of attacks from Yemen’s Houthi fighters, the impact of Russia’s Asian-focused export markets was most acutely seen in its fuel shipments. A number of Russian product tanker shipments have avoided the Red Sea to use the longer and more costly Cape of Good Hope route.
As of Jan. 22, Russia sent 191,000 b/d of clean product from its Arctic, Baltic and Black Sea ports to East of Suez markets, half of last year’s annual rate, the data shows. Similarly, 312,000 b/d of dirty products have been loaded as of Jan. 22, a 51% decline from 2023.
Russian crude tanker diversions have been much less common but some have been noted since mid-January when an escalation in the conflict forced more shipping to avoid the Red Sea.
As of Jan. 22, Russian crude exports from the Arctic, Baltic and Black Sea bound for East of Suez markets, including Kazakh grades, fell from 1.92 million b/d in December to 1.58 million b/d, a 13-month low, the data shows.
“Any disruption to Russian flows through the Red Sea would increase shipments from the Black Sea to India from 25.8 days (2023’s average voyage time) to approximately 35.8 days,” S&P Global Commodity Insights oil analysts said in a recent note. “Similarly, cargoes departing the Baltic region would take roughly 44.3 days compared to an average of 33.3 days last year.”
Since the start of the year, Russian-loaded crude on water — which includes Kazahk exports from Novorossiysk — has now surged 60% or 48.7 million barrels to 131 million barrels by Jan. 30, the data shows, the highest since mid-2023.
Source: Platts
