Russia's seaborne crude exports fell to their lowest level since May, averaging 3.25 million barrels per day (bpd) in the latest week, down from 3.5 million bpd a week earlier, according to vessel-tracking data compiled by Bloomberg. This decline is attributed to a combination of recovering refinery runs and disruptions caused by Ukrainian drone attacks on key ports.
Key Details
Refinery operations in Russia were reported at 3.6 million bpd in July, over 30% lower than the seasonal average, as the country faces a domestic fuel imbalance. The situation has prompted Russia to import fuel from India, with a shipment of 42,000 tons of gasoline arriving from Nayara Energy’s Vadinar refinery earlier this month. Kpler lead analyst Sumit Ritolia noted that this shipment underscores the severity of the domestic petrol shortage and the impact of reduced refinery runs on Russia's product trade flows.
Background
Despite a reported increase in crude and condensate production by approximately 100,000 bpd in July, the ongoing attacks have forced more crude into domestic processing rather than exports. As a result, year-to-date seaborne flows are averaging 3.62 million bpd, about 280,000 bpd above last year’s average. However, logistical challenges remain, including tight tanker availability and port capacity constraints, particularly in the Black Sea region.
Related coverage: China’s Crude Oil Imports Rise 22% in July After Low June, Ukraine Drone Strikes Push Russian Oil Refining to 24-Year.
The decline in Russian crude exports is likely to tighten global oil supply, affecting prices and potentially leading to higher input costs for refiners. Investors will watch for further developments related to Ukrainian attacks and their impact on Russian refinery operations and export capabilities.
Based on reporting by: oilprice.com