Surging Seaborne Oil Exports
Russia’s seaborne oil exports reached a four-year milestone in May, hitting 2.4 million barrels per day from ports like Primorsk, Ust-Luga, and Novorossiisk. Leading to this surge was the domestic refineries’ maintenance season, which allowed for extra barrels, according to Refinitiv Eikon data. This growth has been consistent for the past few months, despite Russia’s commitment to additional cutbacks in cooperation with OPEC+ members.
Saudi Arabia Cuts, Russia Increases Loadings
While Saudi Arabia recently declared a substantial reduction in its output for July, in addition to the broader OPEC+ agreement, Russian refineries decreased runs in May during major seasonal maintenance at most plants. This enabled the state to enhance oil export loadings while reducing production. An insider in the Russian oil market explained that May’s supply was extraordinary but unlikely to be replicated soon, with the next opportunity arising during autumn refinery maintenance.
Meeting Demands of Key Buyers
Russia has ramped up its oil loadings to satisfy the heightened demands of its main customers – India, China, and Turkey, who have all avoided joining Western sanctions against Moscow due to its activities in Ukraine, which Russia refers to as a “Special military operation.” In May, India emerged as the most prominent purchaser of Russia’s Urals oil grade, accounting for approximately 50% of loadings, followed by China at 15% and Turkey at 11%, based on Reuters calculations drawn from Refinitiv Eikon data.
Turkey and Atlantic Ship-to-Ship Operations
Turkey’s procurement of Russian Urals oil reached a seven-month peak in May, as Turkish refiners capitalized on the grade’s low prices. Updated Refinitiv Eikon data indicates that over 260,000 barrels per day of Urals oil were transported to Turkey’s ports last month. Additionally, Refinitiv Eikon data reveals that at least two Urals oil cargoes were utilized for ship-to-ship operations in the Atlantic Ocean near Africa. However, such operations have lost favor among Urals oil suppliers due to increased costs and a scarcity of legal STS hubs permitting Russian crude for operations. Furthermore, a cargo of Siberian Light oil from the Novorossiisk port was prepared for shipment to Sri Lanka at the end of May, following a pause in supplies in April.
