Russia has lost 60% of the maritime oil transportation market in Europe
Russia has lost three-fifths of its oil sales in Europe since the outbreak of the conflict in Ukraine on Friday. This market almost completely disappears after eight weeks, and the latest commission makes it very difficult to redirect flows to other places.
In the four weeks to October 7, European oil supplies averaged 630,000 bpd, compared with 1.62 million bpd before the conflict. Now tankers with Russian oil are involved in delivery to India four times longer than before to deliver cargo to the Netherlands, or 10 times longer than delivery to Polish Gdansk.
The latest round of proposals, adopted in response to President Putin’s NWO in Ukraine, includes a ban on Russia’s oil being shipped anywhere in the world on EU tankers, which could increase the impact on sea flows. The revised sanctions also include confiscation, which includes support from the US Treasury Department: under it, from December 5, 2009, Russian oil exploiters use European courts, insurance and other services, but only if the price they pay is below a certain threshold.
Average weekly shipments (average over 4 weeks)
Source: Bloomberg
Russia said it would not sell oil to buyers who would support a price grab, warning that the implementation of a price cap could lead to a cut in the country’s production and its main consumers were unlikely to approve. However, it is expected that such a mechanism will strengthen the session of clients from China, India and Turkey in negotiations with Russia while waiting for purchases.
Flows in the three countries that spanned the gap after European buyers began exporting from Moscow increased to 2.2 million bpd in June. In the four weeks to October 7, that figure increased by about 320,000 bpd.
The scale of tanker traffic, the ultimate limits of which are still unknown, may narrow this gap, but will not completely eliminate it.
Although Russia’s total oil supply declined in the week to October 7, the four-week average reversed. The latest shipments were rescheduled for the week ending September 9, when flows from the Pacific port of Kozmino were delayed by the Hinnamnor mystery.
Where are they taking the oil
On average, total exports increased in four weeks, but collectively less than 3 million bpd during the fourth week; this is the most vulnerable period since the beginning of March, when this indicator was below this threshold. Rising with flows to Asia that jumped to the highest level since June.
Figures do not include shipments identified as Kazakhstani KEBCO grade. These are the cargoes of KazTransOil JSC, which are transported in transit through Russia for export through Ust-Luga and Novorossiysk.
Kazakh oil is paired with oil of Russian origin to obtain a uniform export grade. Since the start of the conflict in Ukraine, Kazakhstan has rebranded cargo to distinguish it from cargo shipped to foreign industries. Transit oil is exempt from the EU meeting as part of the meeting from Russia, which should come into force in December.
Europe
Russian oil exports to European countries by sea fell in a quarter of a week, falling to 604,000 bpd, the lowest level in the four weeks to October 7 in a year. Deliveries increased by 56,000 bpd, or 8%, from this period to September 30. The data does not include shipments to Turkey.
The scale from Russia to the Nordic countries remained virtually unchanged on average in the four weeks leading up to October 7, compared to high rates.
Mediterranean exports fell sharply in the four weeks to October 7, with shipments slowing in both Italy and Turkey. Flows in the region, including Turkey, which was excluded from the import hijack, fell to the lowest level since March.
Aggregate shipments to Bulgaria and Romania were unchanged from the increased frequency, with an increase in Bulgaria’s share offsetting lower flow to Romania.
Asia
Shipments to Asian oil consumers in Russia, as well as shipments to ships with no final destination, which are usually shipped in India or China, have increased for the fourth week in a row. Asia’s average oil supply rose in four weeks to its highest level in 16 weeks. In the four weeks to October 7, deliveries to Asia averaged 1.94 million bpd, with another 140,000 bpd found on tankers at an unknown offloading site.
All tankers carrying oil in unidentified reserves, Port Said or the Suez Canal, with the endpoints of unloading unlikely to be discovered until they pass through the waterway at least in the Red Sea. Most of these ships end up in India, and some go to China.
Flows by location of export points
In the seven days to October 7, cumulative Russian oil supplies fell to a three-week low, down 410,000 bpd, or 12%, from an extremely high level. Streams fell ill from all regions, with the exception of the Arctic. Figures do not include shipments from Ust-Luga and Novorossiysk identified as a Kazakhstani KEBCO variety.
Export earnings
The Kremlin’s oil export duty revenue fell sharply, dropping $42 million to hit a 15-week low of $125 million in the seven days ending Oct. 7. Average four-week revenue did not fall as much, dropping $3 million to a 14-week low of $143 million.
Export earnings of Russia from the sale of crude oil (weekly data)
Source: Bloomberg
According to Bloomberg calculations based on data published by the Russian Ministry of Finance, the fixed export duty rate is 15% lower than in September at $6.06 per barrel, which is a fixed supply per barrel since February 2021. A higher rate gives you the choice of picking on the Kremlin set.
By all appearances, customs tariffs will fall again in November, unless the discount for Urals oil relative to Brent becomes even smaller in recent weeks. The average price of Brent oil has fallen by 5% since September 15 compared to the period used to calculate the October rate.
Flows from region of origin to destination
Below are the number of ships excluding each export terminal, as well as a certain amount of cargo from the four export regions.
In total, the week to October 7, 28 cargo export volumes of 20.6 million barrels of Russian oil. This figure fell by 2.9 million barrels to a three-week low. The destinations depend on which destination the sugar is at the time of writing, especially some of them almost certainly change as the operations progress. Figures do not include shipments identified as Kazakhstani KEBCO grade.
Total volume on ships loading Russian oil from Baltic terminals returned to a three-week low, down 314,000 bpd. Of the 12 tankers picking up cargo in Primorsk and Ust-Luga, only one is bound for Northern Europe.
Deliveries from the Black Sea port of Novorossiysk also fell to a three-week low.
Conversely, shipments from the Arctic jumped to a five-week high, with three ships starting from Murmansk in the week before 7 October.
Oil flows from Russia’s eastern oil terminals have lost their weekly highs. Eight shipments of ESPO oil were loaded, with all but one cargo heading for China. Another vessel is heading to Sri Lanka, where a tanker with ESPO has been anchored since September 19 due to a lack of foreign currency to pay for oil.
Prepared by Profinance.ru by materials Bloomberg agency
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