Russia Sees Exports Rising Despite Sanctions

Russia has published its official crude export program for the second quarter of this year, which shows a significant increase despite sanctions and decisions by the likes of Shell and Equinor to voluntarily stop buying Russian oil.

Exports via key ports and pipelines — but excluding transit volumes from other countries — have been penciled in at 4.235 million barrels per day for the April-June quarter, according to the program issued by the Russian energy ministry.

The export program for the second quarter shows an increase of 216,100 b/d over the planned volumes for the first quarter.

Total exports from Russia — including transit volumes — have been penciled in at 4.567 million b/d, an increase of 154,000 b/d over the previous quarter.

Market players say Russia's actual quarterly export volumes usually don't line up exactly with the numbers presented in the program, but that they usually do provide some insight into broad trends.

With the US recently banning imports of Russian crude and the UK saying it will phase them out by the end of this year, it's likely that Moscow wanted the latest program to send an upbeat "business as usual" message, despite the war in Ukraine.

The International Energy Agency (IEA) said on Wednesday that Russia may have to shut in 3 million b/d of oil output by April "as sanctions take hold and buyers shun exports," despite record discounts offered to buyers of the country's Urals crude.

Russia's second-quarter exports usually exceed first-quarter exports because domestic refineries typically undergo planned maintenance in April and May, freeing up more oil to be sold to other countries.

Russian exports appear to have held up reasonably well during the first three weeks of the war in Ukraine, but many market players say the real impact of sanctions and voluntary shunning of Russian rule will be seen from April.

That's because deals for most volumes exported in March will have been done before Russian troops invaded Ukraine on Feb. 23.

Pipeline shipments via the Druzhba export pipeline to Europe have been penciled in at 1.064 million b/d — an increase of 94,400 b/d over the program for the first quarter.

Germany and Poland have both stated that they plan to reduce their dependence on Russian energy imports, but both are scheduled to take more crude via the Druzhba pipeline in April-June.

The Druzhba pipeline supplies Russian oil giant Rosneft's PCK refinery in Schwedt, Germany, which underlines that country's dependence on Russian oil and gas.