(Bloomberg) — Russia’s crude shipments rebounded, with Chinapickingup the slack after US President Donald Trump’s punitive tariffs onIndia choked exports to the south Asian nation.
Trump’s doubling ofUS import tariffs on goods from India to 50%, imposed as punishment for itspersistent buyingof Russian oil,appears to be hitting the flow of Moscow’s crude to thenation despite thedefianceof the government in New Delhi.
The amount of crude on tankers heading to India stuckbelow 1.3 million barrels a day in the four-weeks to Aug. 31, down by about one-third from the recent peak seen in March. Even if all the cargoes on ships yet to show a destination ends up in India, flows would still be down by about 550,000 barrels a day, or 28%, from the March peak.
Meanwhile, the amount of crudeheading to China has moved in the opposite direction, reaching afive-month high of 1.28 million barrels a day.
Overall weekly crude shipments from Russian ports jumped by 770,000 barrels a day to a seven-week high of 3.49 million barrels, rebounding from an unusually low level during the previous seven days. The surge pulled up four-week average crude volumes, with seaborne cargoesaveraging3.15 million barrels a day in the period to Aug. 31, tanker-tracking data compiled by Bloomberg show.
Shipments resumed from the Sakhalin 2 project off Russia’s east coast after a four-week absence, likely caused by maintenance work. In thewest, flowsto the Baltic port of Ust-Luga, disrupted bydrone-attack damage to a pumping station, were partly restored, with additional volumes diverted to Primorsk.
The latest uptick in Moscow’s seaborne crude flows comes as Ukraine continues to hit Russian refineries with drones and missiles, potentially making more crude available for export.
Ukraine attacked at least eight Russian refineries lastmonth, forcing more than 13% of the country’s active capacity offline.The disruptions hasadded pressure to crude-processing rates already crimped by longer-than-normal maintenance following a wave of drone attacks in the winter. Work can take longer than expected due to sanctions-linked delays in delivering key equipment, Energy MinisterSergei Tsivilevsaid in July.
A separate attack on the Unechapumping station, on the Druzhba pipeline system close to Russia’s border with Belarus,haltedcrude deliveries to Hungary and Slovakia and hampered flows to the port of Ust-Luga on the Baltic coast. The Baltic Pipeline System 2, which carries Russian and Kazakh crude to the port, begins at Unecha.
The port is expected to operate at about half its normal capacity this month, with crude diverted to Primorsk and Novorossiysk on the Black Sea. Those diversions have already begun, with Primorsk handling a record-equaling 11 tankerslast week.
A total of 32 tankers loaded 24.45 million barrels of Russian crude in the week to Aug.31,vessel-tracking data and port-agent reports show. The volume was up from 19.07 million barrels on 25 ships the previous week.
Crude flows in the period to Aug.31 stoodatabout 3.15 million barrels a day on a four-week average basis, up by 90,000 barrels a day from the period to Aug. 24. The four-week average smooths outbig swings in weekly numbers, giving a clearer picture of underlying trends in crude flows. Using more volatile weekly figures, shipments jumped by about 770,000 barrels to a seven-week high of 3.49 million barrels a day. The increase in weekly flows was driven by more cargoes being loaded at almost all of Russia’s ports.
In addition, there wasone shipment of Kazakhstan’s KEBCO crude during the week from Novorossiysk.
The gross value of Moscow’s exports rose by about $310 million, or 28%,to$1.42 billion in the week to Aug. 31 from $1.11 billion the previous week. The increase in flows was partly offset by slightly lower average prices for Russia’s Urals crude.
Urals cargoes from theBaltic fell by about $0.50 a barrel to average $54.36 a barrel, while shipments from the Black Sea fell by the same amount to$54.91 a barrel during the week. Both set new lows for the period since mid-June.
The price of key Pacific grade ESPO moved in the opposite direction for a second week, rising by $0.60 to average $64.17 a barrel. Delivered prices in India slipped by $0.30 a barrel to$64.43 a barrel, all according to numbers from Argus Media.
On a four-week average basis, the export price of Russia’sUrals from the Baltic was down by $1.50 a barrel, while Black Sea cargoes weredown by $1.40 a barrel, averaging $55.42 a barrel and $55.87a barrel respectively, while Pacific ESPOwas down by about $0.70 a barrel to $63.16 a barrel.
Using this measure, the value of exports was up by about $10 millionfrom the period to Aug. 24,averagingabout $1.28billion a week.
Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to2.7 million barrels a day in the 28 daysto Aug. 31, up from 2.62million barrels a day in the period to Aug. 24.
The figures include about 100,000barrels a day on ships from Western ports showing their destination as Port Said or the Suez Canal, or those from Pacific ports with no clear delivery point, and a further 30,000 barrels a day on tankers yet to signal a destination.
Flows to Turkey in the four weeks to Aug. 31 slipped toabout 340,000 barrels a day, down from thehighest in almosttwo months. Shipmentsto Syria were unchanged, averagingabout 70,000 barrels a day.
This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows.The next update will be on Tuesday,Sept. 9.
All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Thoseare shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and Ust-Luga and are not subject to European Union sanctions or a price cap. The Kazakh barrels are blended with crude of Russian origin to create a uniform export stream. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies.
Bloomberg classifies ship-to-ship transfers as clandestine if automated position signals appear to beswitched off or falsified —a tactic known as spoofing—to hide the two vessels involved coming together to make the cargo switch.
Vessel-tracking data are cross-checked against port-agent reports as well as flows and ship movements reported by other informationproviders including Kpler and Vortexa Ltd.
If you are reading this story on the Bloomberg terminal,click for a link to a PDF file of four-week average flows from Russia to key destinations.
–With assistance from Sherry Su.
More stories like this are available on bloomberg.com
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