Russian Export Schedule for April Divorced From Reality

For April, Russia has drafted one of the busiest monthly seaborne exports programs in nearly three years despite a wave of proclamations by traditional buyers that they will refrain from, or at least curtail, purchases of Russian crude. This is why the schedule appears to have been compiled to demonstrate that Russian oil will keep flowing despite various sanctions and informal bans.

Port loading programs obtained by Energy Intelligence show that exports from key outlets have been penciled in at 2.88 million barrels per day, up by a hefty 431,800 b/d from the March plan and almost 1.2 million b/d from the same period last year.

Total exports from Russian ports, including Kazakh transit, are seen at 3.09 million b/d next month, up by 410,000 b/d from March.

March Trends

Crude exports from the Baltic Sea in the first four weeks of March are higher than February volumes but nearly 200,000 b/d below the loading program for the month, which suggests Russia is finding it harder to place additional cargoes even at steep discounts — seen at over $30 per barrel for Urals.

Actual exports from the Baltic ports of Primorsk and Ust-Luga continue to defy expectations from analysts who had predicted a sizable decline. Loadings through Mar. 28 show exports of 1.275 million b/d. While the trade is increasingly going underground, shipping data show the speed in the fourth week of March is picking up somewhat from the first three weeks.

The bulk of sailings are ending up in Western and Southern Europe. Some sales have no declared buyer or destination. Indonesia’s Pertamina has emerged as a new offtaker, shuttling Urals from Ust-Luga in Aframaxes to a very large crude carrier off the coast off Denmark.

Actual exports from Novorossiysk in the Black Sea are somewhat slower from the frantic pace earlier in March and running at 525,000 b/d. Of the 19 cargoes loading in the first 28 days of March, six were Siberian Light, and all the latter remained in Europe. The 13 Urals cargoes went to Europe or Asia. Crude exports from this port are on par with the volumes of the loading schedule, but sellers are changing up the order. Black Sea volumes now go to Bulgaria, Romania, Italy, Turkey and, increasingly, India and also China.

April Outlook

The picture for April looks even more uncertain, market players say. International trading houses Gunvor, Glencore, Vitol and Trafigura were all winners of Rosneft’s crude oil tender for October 2021-March 2022 and were lifting the barrels under contract.

However, it is unclear who won the six-month tender that Rosneft announced for April-September 2022 volumes. No official tender winners were announced. Increasingly more data is restricted, and a fog has descended on Russia's exports.

On paper, April exports look rather healthy with the Baltic Sea ports of Primorsk and Ust-Luga expected to handle a total of 1.68 million b/d, up by 220,000 b/d on the month. Black Sea exports are seen rising by 142,700 b/d to 653,000 b/d. Exports from Kozmino on the Pacific coast have been penciled in at 756,000 b/d, up by 48,000 b/d.

April is usually a heavy season for Russian refinery maintenance, and this year refineries are also reducing runs as they encounter difficulties exporting products such as diesel and heavy fuel oil. Product exports, or those that can be traced, fell nearly a quarter from February in the first three weeks of March, although Russian traders believe the volume has shrunk by about one-third.

China and India are helping Russia to export its crude, although with an opportunistic eye. Trading sources told Energy Intelligence that China agreed to purchase 10 million metric tons (200,000 b/d) of Russian crude on top of contractual volumes, although with discounts of over $30/bbl. China currently buys 200,000 b/d of Russian crude via Kazakhstan, another 600,000 b/d via the Skovorodino-Mohe-Daqing pipeline, while it also buys spot cargoes from Kozmino.

CPC Outages

Adding to the volatility is Kazakhstan. Loadings at the 1.34 million b/d Caspian Pipeline Consortium (CPC) terminal on Russia’s Black Sea coast are running at minimal capacity after two of its three single point moorings (SPMs) were apparently damaged in a storm last week.

Unscheduled repair work will likely last for up to two months, which might cost the market some 1 million b/d in CPC Blend outages.

The CPC pipeline has the capacity to ship 67 million tons of crude per year (1.34 million b/d). Last year it shipped 1.22 million b/d, of which 1.07 million b/d was from Kazakhstan and 150,000 b/d from Russia. Out of the 585 tankers loaded at the terminal last year, 213 ended up in Italy, 41 in Spain, 39 in France and 26 in the US.