Export of oil and oil products from Russia approached a historical maximum

The total export of oil and oil products from Russia in January 2023 increased by almost 300,000 barrels per day compared to the level of December 2022 and amounted to 8.2 million barrels per day. This is reported in the report of the International Energy Agency (IEA) dated February 15.

It is emphasized that January deliveries “approached the historical record” set in February 2020 (absolute figures are not given).

According to the IEA, oil product exports were flat at 3.1 million barrels per day in January ahead of the EU embargo on maritime supplies from Russia, which came into effect on February 5. Simultaneously with the embargo, a price ceiling for petroleum products began to operate. The limit is set separately for more expensive oil products (for example, diesel fuel) – $100/bbl and for cheaper ones (fuel oil) – $45/bbl.

Against this background, the export of oil and oil products from Russia to the EU in January 2023 fell threefold to 1.3 million barrels per day, to the level that was recorded before the start of the NWO in Ukraine. Russian oil deliveries to the region fell to 0.6 million bbl/d from 1 million bbl/d in December 2022 amid an embargo on oil supplies to the EU by sea, which came into force on 5 December 2022.

Bulgaria has an exception to the oil embargo (valid until the end of 2023), it is also made for oil supplied through the Druzhba pipeline. The IEA report says pipeline deliveries halved to 400,000 bpd in January due to Germany’s rejection of Russian supplies. Also this year, as Vedomosti wrote (see issue dated February 1, 2023), pumping through Druzhba to Poland has decreased.

After the strengthening of anti-Russian sanctions due to NWO, oil companies from Russia had to redirect supplies from the European market to the Asian one. As a result, China and India have become the largest buyers of Russian oil.

In January, oil exports from Russia to China set a record – deliveries increased by 300,000 barrels per day to 2.1 million barrels per day, the IEA said in a review. Russian oil exports to Turkey increased from 40,000 bbl/d in December 2022 to 180,000 bbl/d in January this year. But it is still well below the levels of August-October 2022, when about 350,000 barrels per day were supplied to the country.

There are also new buyers of Russian oil. These are, for example, Ghana (20,000 bbl/d in January) and Indonesia (25,000 bbl/d). The total export of Russian oil in January amounted to 5.1 million barrels per day, follows from the IEA data.

Exports of oil products from Russia, the report notes, were broadly unchanged in January from the previous month, but deliveries to the EU fell from 1.2 million barrels per day to 740,000 barrels per day. Diesel supplies to the European Union have been hardest hit, dropping from a record 750,000 b/d in December 2022 to 470,000 b/d in January 2023.

In January 2023, Russia supplied to Turkey and India, as a month earlier, about 330,000 barrels per day and 210,000 barrels per day of oil products, respectively. By the level of January 2022, these figures increased by 210,000 bbl/d and 90,000 bbl/d, respectively. Exports of petroleum products to other countries increased in January 2023 by 400,000 barrels per day to 1.4 million barrels per day, and the main increase was in the Middle East and Latin America, according to the IEA report.

Experts attribute the increase in exports in January 2023 to a “some increase” in the country’s oil production and strong demand for Russian oil products before the EU embargo and price ceiling come into force. Analyst FG “Finam” Alexander Potavin notes that a number of countries are trying to benefit from the EU decision. “China, India, Singapore, as well as the countries of the Middle East, began to willingly take Russian raw materials for further processing at their refineries, while Morocco and Turkey increased their imports of diesel from Russia,” he says.

The head of the Energy Development Center, Kirill Melnikov, also recalls that the export of oil products from the Russian Federation traditionally increases in winter due to seasonally weak demand in the domestic market. Stock market expertBCS The World of Investments” Igor Galaktionov agrees with him and adds that trial deliveries of oil products to new foreign buyers began in January.

Melnikov believes that due to the plans of the Russian government to reduce oil production by 500,000 barrels per day from March (Deputy Prime Minister Alexander Novak spoke about this on February 10 – Vedomosti), exports of oil and oil products will decrease in March. According to him, exports may be reduced by 500,000-700,000 barrels per day in March compared to January 2023. Galaktionov specifies that the drop in exports of petroleum products will be offset by oil exports.

Kirill Rodionov, an expert at the Institute for the Development of Fuel and Energy Complex Technologies, notes that the key factor in the growth of oil exports was a change in the geography of supplies, namely their reorientation to India and China. According to Melnikov, oil supplies to China will grow, and confirmation of this trend can be seen already in February. Ekaterina Krylova, managing expert of the PSB Analytics and Expertise Center, believes that the increase in exports to China will be facilitated by the approval of the Chinese government for purchases of Russian oil by Chinese state-owned companies.

In total, according to Krylova, Russia can export to China in 2022 2.2-2.3 million barrels per day of oil. Demand in Turkey, according to Melnikov, will be limited due to the effects of recent earthquakes and the depreciation of the lira. The total export of Russian oil will be about 4.27 million barrels per day, which is 11.7% lower than in 2022, oil products – 2.06 million barrels per day (-22.9% compared to 2022), predicts Krylova.

Galaktionov adds that more than 90% of crude oil now goes to India and China. But, in his opinion, it is possible that new buyers will appear among neighboring countries and Asia. According to Krylova, one can theoretically expect deliveries of Russian oil to Pakistan, Brazil, South Africa and Sri Lanka.