Russia’s Crude Shipments Slump on Halt at Major Export Terminal
Bloomberg June 27, 2023
Russia’s seaborne crude oil flows to international markets slumped last week but maintenance work, rather than output cuts, is the most likely cause.
Crude flows through Russian ports fell by about 980,000 barrels a day in the week to June 25. Lower shipments were seen from all regions, but hardest hit was the Baltic, where fewer than half the normal number of tankers were loaded at Primorsk. The port accounted for more than half of the week-on-week drop in the country’s total seaborne crude exports.
Crude shipments through Primorsk dropped in exactly the same way during the same week last year and the pattern can also be seen in both 2020 and 2021, albeit a week earlier. In all three years, shipments rebounded the following week.
There was a gap in the loading program for the port, with no cargoes due to complete loading between June 21 and June 25, indicating that the drop in flows was planned. The program then reverts to its more normal pattern of at least one cargo completing loading each day for the rest of the month.
There was also a big drop in shipments from the Pacific, where flows were down week-on-week by more than 200,000 barrels a day. A slump in shipments from Kozmino was partly offset by an increase in the flow from Sakhalin Island. But it’s unlikely that this reflects an output cut either. Exports from Pacific ports command higher prices than those from the west of the country and shipping times to key markets in China and India are shorter, making cuts to flows from Kozmino unlikely. A gap in the Kozmino loading program suggests the dip in flows from the port will also be temporary.
Moscow has said previously that lower flows resulting from its output cut would be targeted at ports on the Baltic and Black Sea. But there has been no sign of a significant drop in flows from the Baltic port of Ust-Luga, nor from Novorossiysk on the Black Sea.
Meanwhile, Russian refineries raised crude processing rates to the highest level since April in the week to June 21, as the nation’s downstream maintenance season nears its end.
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