Russia cuts seaborne crude flows to 3-mnth low before OPEC+ meet

Moscow: Russia cut back its seaborne crude exports to the lowest since August before a meeting of OPEC and allies oil minsters this weekend when compliance with production cuts will be in sharp focus.

The move came after shipments surged in October, Bloomberg reported.

About 2.7 million barrels a day of crude was shipped from Russian ports in the week to November 19, tanker-tracking data monitored by Bloomberg show. That was down by 580,000 barrels a day from the revised figure for the period to November 12, the biggest week-on-week drop in more than four months.

Moscow said in early August that it would prolong export restrictions at a reduced rate of 300,000 barrels a day below their May-June average level until the end of the year, a policy confirmed earlier this month. If the burden falls entirely on crude, that would imply seaborne shipments of 3.28 million barrels a day.

But Deputy Prime Minister Alexander Novak told Interfax last month that the reduction is spread across both crude and refined products. That complicated assessments of whether Russia was meeting its commitment after the government imposed a temporary fuel export ban in September.

The OPEC+ group of oil producers, jointly led by Russia and Saudi Arabia, will meet in Vienna on November 26 when they will consider how to respond to a weakening oil market outlook, as well as setting output targets for the first half of 2024.

The less volatile four-week average flow fell to 3.23 million barrels a day, down by about 200,000 barrels a day from the revised figure for the period to November 12.

That was the lowest in eight weeks, but still about 340,000 barrels a day above shipments in the period to August 20, when Moscow’s crude export cuts were at their deepest.

Russia’s oil-processing jumped in the week to November 15 to the highest in

almost three months as

the nation’s refiners returned most of their capacity after

seasonal maintenance.

The Kremlin’s weekly revenues from oil export duties fell to the lowest in two months, with the drop in volume partly offset by a higher November duty rate.

From January, Russia’s oil producers are set to pay a higher output tax to fund increased downstream subsidies, which were reinstated in October after being halved the previous month. Export duty is set to be abolished at the end of this year as part of Russia’s long-running tax reform plans.

Russia’s seaborne crude flows in the four weeks to November 19 slipped to 3.23 million barrels a day. That was down from a revised 3.43 million barrels a day in the period to November 12.

Shipments fell to an eight-week low and were about 360,000 barrels a day below the average seen during the surge in volumes between April and June.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and the Baltic port of 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 grade.

Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies.

Observed shipments to Russia’s Asian customers, including those showing no final destination, fell to 2.73 million barrels a day in the four weeks to November 19, down from a revised 2.93 million barrels a day in the period to November 12. That’s well below a peak of about 3.6 million barrels a day seen in May.

About 1.17 million barrels a day of crude was loaded onto tankers heading to China in the four weeks to November 19.

China’s seaborne imports are supplemented by about 800,000 barrels a day of crude delivered directly from Russia by pipeline, either directly, or via Kazakhstan.

Flows on ships signaling destinations in India averaged about 1 million barrels a day in the four weeks to November 19.

Both the Chinese and Indian figures will rise as the discharge ports become clear for vessels that are not currently showing final destinations.