Page 11 - RusRPTApr23

2.0 Politics
2.1 Russia's oil product exports slumped by 20% in
February, but seaborn export volumes remain robust
Russia's oil product exports have slumped by 20% in February, marking the lowest level since May 2022, according to tanker tracking data reported by S & P on March 2 in a note. Shipborne exports of crude, however, have held
up well and remain robust.
“Russia-origin seaborne oil product exports averaged 2.13mn b/d in February, a 21% slump from recently elevated levels of around 2.7mn b/d in January and 24% below average pre-war levels, according to S&P Global Commodities at Sea data,” the consultant said.
Analysts are watching the export volumes of Russia’s oil products closely after they came under embargo on February 5. Last year Russia successfully reorientated all
its export of crude to customers in Asia – primarily Indian and China – after the EU reduced its oil imports to almost nothing in anticipation of an crude import embargo that came into effect on December 5.
Crude exports initially slumped after the start of the war as Western oil traders self-sanctioned and stopped buying Russia’s Urals blend, but the market quickly adjusted within a few months, as Russia found new customers. Instead of the week it takes to ship oil from Russia’s main oil export terminal in Primorsk to Rotterdam in the Netherlands, it takes a month for tankers to travel to Asia and back so the market took two months to rebalance.
Pulling off the same trick with oil products will be more difficult as products like Russia’s diesel fuel are much more widely distributed and Russia is now in competition with its own crude exports as potential customers are refining more cheap Russian crude, which lowers their need for imports.
“The largest impact has been felt in the diesel and fuel oil markets, Russia's biggest fuel exports and revenue earners. Russian diesel exports slumped by more than 100,000 b/d in February to 830,000 b/d while fuel oil exports slid by some 170,000 b/d on the month to 614,000 b/d, the data shows,” S&P said.
There is also a logistical question mark over Russia’s ability to find enough shipping capacity to carry all its production to overseas markets. Russia has built up a large “ghost fleet” but estimates of the size of the fleet varies
from 100 ships to 600. While it is clear that Russia already has enough ships to export all its crude, it remains moot as to if it has enough to transport
all its products. Russia imposed a 500,000 barrels a day production cut that went into effect on March 1, to either compensate for falling demand or to push up prices – it is not yet clear which reason drove the decision to cut back on production.
11 RUSSIA Country Report Russia April 2023 www.intellinews.com