November 11, 2023 [Hellenic Shipping News]- Russia’s seaborne oil exports rose to a four-month high in October as its crude flows rebounded above its pledges to OPEC+ while the country’s ban on road fuel exports pushed oil product flows close to post-Ukraine war lows.

 
Crude shipments from Russian export terminals averaged 3.53 million b/d in October, a 7.4% rise on the month to the highest since May and above the average pre-war level of 3.1 million b/d, according to tanker-tracking data from S&P Global Commodities at Sea (CAS).
 
Russia’s crude exports have been recovering since August when the government committed to easing export curbs agreed as part of a joint move with OPEC+ kingpin Saudi Arabia to cut 1.3 million b/d of crude supplies to support global oil prices.
 Russia has said its crude exports would be 300,000 b/d below the May-June average through the end of 2023. But the data, which excludes Russian pipeline exports mostly via the ESPO line to China, showed seaborne crude exports last month were some 150,000 b/d below the May/June average of 3.68 million b/d.
 
Despite the shrinking discount for Russia’s key Urals crude to Dated Brent, Moscow’s flagship crude accounted for 56%, or 1.97 million b/d, of the October total, the data shows. Of the total, 43% of Russian crude flows were earmarked for India and a further 1 million b/d, or 29%, were headed for China.
 
Urals DAP West Coast India discount to Forward Dated Brent stood at $4.40/b on Nov 1, almost the tightest margin since S&P Global Commodity Insights unit Platts began assessing the spread at $19/b in January. Spot prices for Russia’s Urals grade have been trading above the G7’s $60/b price cap since July 11 but Moscow has been successful in redirecting its oil to non-Western customers through a growing shadow tanker fleet and, until recently, tepid sanctions enforcement by the US.
 
India imported 1.1 million b/d of Urals in October, on par with a 2023 low in July, but Russia remained India’s primary crude supplier in October accounting for more than a third of total crude imports.
 
Meanwhile, Russia’s oil product exports slumped by 190,000 b/d the month to average 2.12 million b/d, the data showed, marking a 17-month low and down from a post-war high of 3 million b/d in March.
 
Combined, total Russian shipped crude and oil product exports averaged 5.64 million b/d, the highest since June, and 280,000 b/d below pre-war levels, according to CAS data.
 
Product exports
The slump in Russian oil product exports close to post-war lows follows a temporary halt to Russian diesel and gasoline exports end the end of September and early October.
 
Russian diesel exports, which had already been falling in recent weeks due in part to higher domestic refinery turnarounds and the diesel-intensive harvest season, averaged a post-war low of 597,000 b/d in October, down 50,000 b/d month on month and from a recent peak of almost 1.2 million b/d in March, according to CAS data.
 
Russia largely lifted its ban on diesel exports on Oct 6, two weeks after its surprise move to curb soaring domestic pump prices. The initial move threatened to remove up to 1 million b/d of seaborne diesel from world markets and smaller gasoline flows of around 150,000 b/d.
 
“The Russian export ban did not last long but served as a reminder that although the reshuffle of global trade post-embargo has been relatively smooth and no physical shortages have been observed, the risk premium on diesel prices is still lurking,” S&P Global Commodity oil analysts said in a recent note.
 
The largest fall in Russian oil products last month, however, was seen in vacuum gasoil flows which almost halved by 108,000 b/d on the month to 141,645 b/d, the data showed.
 
In addition to the export ban, 800,000 b/d of refining capacity in the former Soviet Union region remained offline as of Oct. 27, according to S&P Global Commodity Insights’ Global Refinery Outage report. More refineries were anticipated to return online as the outage figure was expected to fall by 140,000 b/d during the week ending Nov. 3.
 

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