Page 102 - Russia OUTLOOK 2024

Russian oil exports fell somewhat in November – down 2.7% vs. September-October to 7.2mn bpd. Lower shipments to India (1.4mn bpd in November vs. 1.8mn bpd in October) as well as China play a key role. KSE believes that higher prices for Urals as well as somewhat stronger price cap enforcement are behind this.
Sanctions enforcement matters, as in the case of weak implementation, Russian oil revenues could approach a robust $184bn and $202bn in 2023 and 2024 respectively, according to KSE.
In 2023 oil sanctions became a spent cannon as not a single barrel of Russian oil was sold under the $60 cap in 2023, the FT reports.
Greece ramped up its transport of Russian oil to a 55% share of the total after the war started, but in the second half of 2023 had been reducing its share again as Greek shipping companies sold old tankers to Russia. An effort to ban these sales as part of the twelfth sanctions package failed thanks to lobbying by Greece. Greek vessels have carried 20% of all Russia’s oil shipments so far in 2023 and almost a third of its exports of the flagship grade Urals crude, according to shipping data.
Oil tanker owners in Greece reduced the amount of Russian oil they carry again from November after they were threatened with US sanctions. The number of Greek tankers bound for Russia will drop by 25% in December compared to last month and by 60% compared to June.
Discounts falling
As customers – particularly in China and India – became accustomed to using the shadow fleet, the discounts between Russia’s flagship grade Urals and international prices narrowed. From $35 per barrel in the early days of the war, discounts on Russian oil had fallen to $10 a barrel in December and analysts expect the gap to narrow further by about $5 in 2024.
Energy sanctions, in particular the EU embargo, weighed on Russian exports via sharply wider oil price discounts. However, the Urals-Brent spread has narrowed from $40/bbl in January to around/below $15/bbl in H2 2023. The
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