Russian Oil Exports Set for September Rise

Crude oil exports from Russia's major ports, excluding transshipments of Kazakh, Turkmen and Azeri barrels, are penciled in at 1.918 million barrels per day in September, up by roughly 40,000 b/d from the August plan, preliminary loading programs issued by pipeline operator Transneft show. Total exports, including transit volumes, are seen rising by 25,000 b/d on the month to 2.222 million b/d. Starting from August, Russia can boost output by 100,000 b/d every month until December in accordance with the Opec-plus agreement struck in July. But high domestic demand and pressure from the state on oil companies to process more feedstock at home will restrain growth in exports. At the same time market participants say that exports might rise in October, when some 500,000-600,000 metric tons of crude would be freed up as a result of refinery maintenance. Gazprom Neft has shifted to October planned maintenance at its Omsk refinery in order to ensure sufficient products sales on the domestic market. As a result of planned maintenance, coupled with higher production, seaborne exports are poised to increase in October. Hefty Maintenance Schedule But even the September turnaround schedule is hefty and is poised to knock out some 3.7 million tons of primary refining capacity, or nearly 15% of the industry's total capacity, according to data gathered by Reuters. In September, exports from the Baltic Sea ports of Primorsk (table) and Ust-Luga (table) should drop by 35,000 b/d to a total of 1.098 million b/d, largely because there will be no shipments from Primorsk during Sep. 7-14 due to port maintenance. Shipments from the Black Sea port of Novorossiysk should grow by 13,800 b/d on the month to 407,000 b/d (table). Trading sources also say that demand for Espo crude in China seems set to remain high despite overall sluggish Chinese buying in recent months. The recent tender that Surgutneftegas, Russia's fourth-largest producer, announced for additional Espo barrels for delivery at the Pacific port of Kozmino was closed quickly, with Vitol emerging as the buyer. The October Kozmino port loading program (table) was set at 756,000 b/d compared to 717,000 b/d penciled in for September, which was itself up by almost 47,000 b/d from August (table). Meanwhile, market players still expect state-controlled Rosneft to announce the results of its six-month crude oil tender to lift 12.63 million tons (92.4 million barrels) of Urals and CPC Blend crude from Baltic and Black Sea terminals in October 2021-March 2022. Market players say that international traders are in the forefront, with Gunvor seen as a leader for the Baltic Sea barrels, while Trafigura might take most of the Urals and CPC barrels on the Black Sea. Nadezhda Sladkova, Moscow