Save for later Print Download Share LinkedIn Twitter Russia will continue its efforts to diversify crude oil exports to non-European markets with the share of shipments to the Asia-Pacific region to grow, officials and oil companies told the recent St. Petersburg International Economic Forum as sanctions against Russian oil are ramping up in the EU.“In a situation when we are practically being pushed out of the European market, it is necessary to ensure the growing markets of the Asia-Pacific region,” Russian Deputy Premier Alexander Novak said in an interview on Russian TV last week. This year already, Russia might increase shipments to the Asia-Pacific region via the East Siberia–Pacific Ocean (Espo) pipeline to the port of Kozmino by 7 million tons (140,400 barrels per day) to 42 million tons (842,300 b/d) due to the use of additives along the pipeline.Record HighsChina and India are seen as the largest potential buyers of Russian barrels, although the increase of supplies would come at a cost as Russia would have to build a new tanker fleet and find new logistic schemes, traders and insurance companies. Over the past three months, Russian supplies to China and India have grown to record highs as buyers were attracted by steep discounts for Russian barrels. In May alone, Russian crude exports to China ramped up by 390,000 b/d compared to April and reached 1.99 million b/d — their highest level since January 2007.Apart from expanding the Espo pipeline further, the other way to increase Russian shipments to China is boosting supplies via Kazakhstan. Russia’s Rosneft currently pumps 10 million tons per year (200,000 b/d) via Kazakhstan, but the capacity of the line in Kazakhstan is 400,000 b/d, Kazakh Energy Minister Bolat Akchulakov told Energy Intelligence. Excluding some 40,000 b/d of Kazakh crude shipped via the line, Kazakhstan can potentially increase Russian shipments to China via the route by over 160,000 b/d, he added. But the key issue would be the quality as China might not be ready to take more of the mix that is currently being supplied. Sources in Russia also say that higher shipments through Kazakhstan would also require expansion of pipelines in Russia. There were no discussions on the issues so far, sources say.RedirectionSources in Russian companies also added that intense work is being carried out to redirect Russian oil flows. Apart from China and India, potential buyers include Vietnam, Pakistan, Indonesia, Malaysia and other countries. Russian companies discussed supplies to Vietnam during the St. Petersburg forum last week, Novak confirmed.Russian shipments to the Asia-Pacific via the Kozmino terminal in July-September might total roughly 760,000 b/d, up from 692,000 b/d planned for April-June, according to market insiders. Seaborne shipments from other ports, including Primorsk and Ust-Luga on the Baltic Sea and Novorossiysk on the Black Sea are also seen rising in the third quarter, ahead of the Dec. 5 deadline when the EU oil embargo for Russian seaborne crude goes into effect. On the other hand, Russian shipments via the Druzhba pipeline to Europe are expected to go down as Germany and Poland keep cutting Russian imports voluntarily despite the fact that pipeline shipments from Russia have been excluded from the EU's recent sixth package of sanctions. Overall, Russian exports to global markets, excluding transit volumes, are seen rising by some 270,000 b/d on the quarter in July-September, according to market insiders.