Russia Seaborne Crude 2023 with a surge in seaborne crude exports, marking the highest four-week average shipments since early November. Data from Bloomberg’s tanker-tracking service reveals that about 3.46 million barrels a day of crude were shipped from Russian ports in the four weeks leading to December 31. This figure represents an increase of 230,000 barrels a day from the previous period, signaling a robust end to the year for Russia’s crude oil exports.
Highlights of Seaborne Crude Exports
1. Record-Breaking Shipments
Weekly flows reached the highest point since July, with a volatile average jump of 560,000 barrels a day to 3.78 million. The surge in exports reflects Russia’s role as a major player in the global crude oil market.
2. OPEC+ Commitments
Despite the increased exports, Russia has committed to deeper oil export cuts. Moscow pledged a reduction of 500,000 barrels a day below the May-June average during the first quarter of 2024. This decision follows Saudi Arabia’s extension of its unilateral one-million-barrel-a-day supply reduction, and OPEC+ members’ agreement to further output curbs.
3. Challenges in Assessing Commitments
The reduction targets for December were set at 300,000 barrels a day, spread across both crude and refined products. Assessing whether Russia is meeting its commitments to OPEC+ partners becomes complex due to this distribution. The reduction involves a decrease of 300,000 barrels a day in crude shipments and a corresponding reduction in refined products.
4. Geopolitical Risks
Approximately 1.7 million barrels a day of Russia’s crude exports pass through the Red Sea. While tankers carrying Moscow’s oil are unlikely to be targeted by Houthi rebels in Yemen, there remains a risk of accidental attacks on ships carrying Russian supplies. The geopolitical landscape adds an element of uncertainty to the smooth transit of oil shipments.
Regional Flows and Destinations
1. Asia
Observed shipments to Russia’s Asian customers, including those with no final destination specified, rose to 2.99 million barrels a day in the four weeks to Dec. 31. This figure represents an increase from the previous period, reaching the highest levels since October. Notably, crude flows to China and India have been substantial, with China’s seaborne imports supplemented by pipeline deliveries from Russia.
2. Europe and Turkey
Russia’s seaborne crude exports to European countries have significantly declined since the invasion of Ukraine in February 2022. Long-haul destinations in Asia have replaced the lost short-haul market in Europe. Exports to Turkey and Bulgaria, the only remaining European buyers close to Russia’s western ports, have stabilized, with combined flows ranging between 450,000 and 500,000 barrels a day.
Revenue and Export Duty
Despite the challenges and geopolitical risks, the Kremlin’s four-week revenues from oil export duties reached their highest level for the year. Russia abolished oil export duties at the beginning of 2024, aligning with its long-running tax reform plans. The increased revenues reflect the country’s strategic decision to transition to higher output taxes from oil producers.
Future Trends and Considerations
As Russia navigates the changing dynamics of the global oil market, attention will be on its ability to meet the committed export reductions and address geopolitical risks. The surge in year-end exports indicates Russia’s continued significance in global crude oil trade. Ongoing developments, both within Russia and in the broader geopolitical landscape, will shape the trajectory of its seaborne crude exports in 2024.