Reports say Russia’s oil exports remained active in February despite increasing Western sanctions. Bloomberg said the country ostensibly found new buyers of its products, quoting Kpler data, a leading provider of intelligence solutions covering over 25 commodity markets.
The report yesterday said Russian producers, aided by ‘shadow fleet’ of tankers, have turned to buyers in the Gulf, Latin America and Asia, ship-tracking data shows.
The EU banned seaborne fuel imports in early February, two months after imposing restrictions on crude shipments. The sanctions come on top of the price caps on Russian cargoes that third countries must observe, if they want access to western services like shipping and insurance.
Despite that combination of curbs hitting in February, Russian producers exported an average of 7.32 million barrels a day of crude oil and petroleum products, data from the research firm Kpler shows.
That’s in line with volumes shipped in December and only 9% below the historic high in January.
The analytics firm said the monthly decline in Russia’s seaborne flows is mostly the result of unusually high January exports, which partly related to weather disruptions.
Kpler crude analyst Viktor Katona, said bad weather in early winter led to “a sizable carry-on effect of cargoes that were bound to load in December yet were pushed into January,” leading to peak flows, he said.
“Storms have come back this month again after a relatively tame January, especially in the Black Sea, with the port Novorossiysk repeatedly shut throughout the month.”
Despite that resilience, Russia’s oil exports face further strains as India, a top buyer of its crude, sees mounting pressure from bankers to demonstrate that the cargoes comply with the $60-barrel price cap. Tougher monitoring may weigh on India’s purchases of Russian barrels.
Kpler said next month’s exports may also be affected by the Kremlin’s decision to cut oil production by 500,000 barrels per day in retaliation for the western bans.
The baseline for the cut is the nation’s January production, which reached around 10.86 million barrels per day. So far, it remains unclear whether Russian producers will prefer to reduce their crude exports or domestic processing as a result of the curb.
Preliminary March plans indicate the oil firms intend to keep refinery runs high to take advantage of huge tax benefits that are set to decline from April.