August 7, 2023 [Riviera]- Russian seaborne crude oil export volumes grew in 2022, despite the invasion of Ukraine, but as BIMCO chief shipping analyst Niels Rasmussen reports, June and July 2023 figures reveal a change.

Russian seaborne crude oil export volumes have remained strong and grew 13% year-on-year in 2022, despite the invasion of Ukraine. However, after a 4% month-on-month fall in June, volumes fell another 16% month-on-month in July, and the Russian administration has announced export cuts for August, said BIMCO chief shipping analyst Niels Rasmussen.

An even more important factor for the crude tanker market is how EU regulations have reshaped crude trades.

China, India and Turkey have replaced EU countries as the main buyers of Russian crude oil, resulting in average sailing distances increasing 80-90% and significantly increasing tonne miles and demand for crude tankers.

The declining volumes in July again brought new changes to the destination split. India has recently taken 32-38% of the Russian export volumes but in July took only 12.5%. Instead, Turkey and Egypt have increased their share.

The changed destination split means the average sailing distance for Russian export volumes fell 38% month-on-month in July and ended 30% lower than July last year.

The Russian administration has announced that exports in August will be reduced by 500,000 barrels per day to support oil prices (approximately 2.1M tonnes).

Seaborne export volumes fell 3.3M tonnes in July, and it remains to be seen whether the announced reductions will be in addition to the July reduction, noted Mr Rasmussen.

If exports fall further, August volumes would end near 15M tonnes, a level last seen in September 2021, he added in his latest report.

Despite the decrease in Russian export volumes, an increase in Iraqi and Brazilian exports meant that global crude oil export volumes overall increased 3% month-on-month in July.

However, the changes in origin and destination patterns had a significant effect on average sailing distances, and BIMCO estimated that tonne miles fell 15% month-on-month.

Other factors impacting tonne-mile demand noted by Mr Rasmussen included Indian refineries undergoing maintenance and the monsoon.

Altogether, lower demand, and the price for Urals crude having recently breached the G7 price cap, may see some tanker owners exit the Russian business, despite the premium freight rates available, concluded Mr Rasmussen.

Pro Trial: Access 12,600 Tank Terminal and Production Facilities

12,600 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data