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Russian Crude Exports Rose in March

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Russia increased its crude oil exports to non-former Soviet Union (FSU) countries by about 5% in March, the first full month since Moscow sent its troops into Ukraine on Feb. 24.

Many pundits believe Russia's exports will decline in the coming weeks and months as the result of sanctions and voluntary decisions to cut back on trade with Russia in protest at the war in Ukraine.

However, the country's own data showed no such effect in March, as commodity trading firms with a relatively low public profile helped to prop up exports and nontraditional buyers such as India took advantage of huge price discounts.

Energy ministry data showed that exports to non-FSU countries — excluding transit volumes produced in other countries — totaled 4.75 million barrels per day (20.1 million metric tons) in March, up from 4.5 million b/d in February.

The March total was also up by more than 860,000 b/d versus the same period last year.

Russian crude production has increased over the last year as Opec-plus reversed the big cuts in output made in 2020. Exports were also limited in March 2021 as the government ordered producers to send more crude to domestic refineries.

While exports rose in March, deliveries to Russian refineries fell by an even larger amount to 5.331 million b/d from 5.954 million b/d in February — a drop of more than 600,000 b/d.

Seaborne Exports Rise

Russian seaborne exports from the ports of Primorsk and Ust-Luga (Baltic), Novorossiysk (Black Sea) and Kozmino (Pacific) rose to 2.39 million b/d in March from 2.093 million b/d in February.

While governments have announced various sanctions against Russia, only the US has directly banned imports of Russian oil and gas.

Nevertheless, companies like Shell, TotalEnergies and BP have pledged to end, phase out or limit their business ties with Russia, including purchases of crude oil.

As a result, Russian crude exports have "gone dark" to a large extent, with little visibility about who will ultimately take delivery. Many cargoes have been ending up in storage tanks or are being shipped without a buyer being specified.

Some cargoes, however, have been snapped up by new customers, who have been attracted by discounts of $30 per barrel or more for Russia's Urals blend.

Over the past month, more Urals went to India, China and now also Indonesia, where buyers are less concerned about potential damage to their reputations.

Pipeline Volumes Fall

Russia's exports via the Druzhba onshore pipeline to Europe fell slightly to 821,000 b/d in March from 841,000 b/d in February.

But market players said Druzhba pipeline volumes were higher than the originally planned level of 754,000 b/d. Germany, Slovakia and Hungary all took more crude via Druzhba than had been planned.

Pipeline shipments to China fell to 764,609 b/d in March from 780,000 b/d in February, but that was in line with planned volumes for the month.

Russia's crude shipments to neighboring Belarus — a former FSU state — plummeted to 63,283 b/d in March from 144,256 b/d in February, reflecting planned maintenance at the Mozyr refinery, which was completed in late March.

Russian producers supply only the Mozyr refinery to avoid breaching sanctions on the country's Naftan refinery.

Russian Crude Oil and Gas Condensate Production
('000 b/d)Mar '22Feb '22YTDMar '21
Rosneft 3,343.13,411.93,376.83,465.3
Lukoil 1,599.51,608.91,605.81,472.3
Surgutneftegas1,243.01,243.01,235.41,075.1
Gazprom Neft826.6779.9794.5796.0
Tatneft575.0574.7575.3532.1
Bashneft386.3384.1384.7227.6
Slavneft 233.5233.1233.5144.0
Other Producers2,462.02,503.52,489.02,181.9
PSA Operators327.3322.3327.4354.4
Russia Total 10,996.311,061.311,022.410,248.7

Topics:
Oil Supply, Sanctions, Military Conflict
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