Russian exports in March were boosted by oil prices

The low performance of Russian foreign trade at the beginning of the year gave way to growth in March: according to the Central Bank, the balance of trade in goods in the balance of payments more than doubled compared to February, to $16.9 billion. This is likely due to higher oil prices and increased supplies — it is recorded by the International Energy Agency (IEA) in its March report. Chinese trade data also indicate an increase in supplies from the Russian Federation – Russian imports are also growing, but more moderately.

The balance of foreign trade of the Russian Federation in January-February decreased year-on-year by 14.6%, to $16.9 billion, according to the Federal Customs Service data published on Friday. Exports of goods from the Russian Federation, according to the service, decreased by 7.6%, to $58.5 billion, imports – by 4%, to $41.6 billion. The data takes into account the statistical value of declared goods, Acting Federal Customs Service Ruslan Davydov previously explained.

A breakdown by region (data for individual countries is still closed) shows a decrease in exports to Europe by half, to $9 billion (this statistics already partially takes into account the embargo on the supply of petroleum products from the Russian Federation, which entered into force on February 5, 2023), supplies to Asia year-on-year increased by 10%, to $45.2 billion, to the countries of America – by almost a third, to Africa – almost unchanged. Imports from Europe and America during this time decreased by more than 18%, from Asian countries – increased by 3.9%. Exports from the Russian Federation of mineral products in January-February amounted to $36.6 billion (minus 10.7%), metals and products made from them – $7.5 billion (minus 10.4%), agricultural products – $6.3 billion (minus 1 ,9%). Imports of machinery, equipment, vehicles and other goods amounted to $21 billion (plus 4.9% year-on-year), chemical industry products – $8 billion (minus 16.8%), food and agricultural raw materials – $5.4 billion (minus 10 ,4%).

In March, however, the trend reversed: in the Central Bank’s balance of payments assessment, the trade balance in goods amounted to $16.7 billion, compared to $7.7 billion in February and $6.8 billion in January. This is caused by an increase in exports to $39.6 billion ($30.3 billion in February, $28 billion in March) with a very slight increase in imports to $22.9 billion. Note that the head of the Central Bank, Elvira Nabiullina, has already warned that excess demand will put pressure on imports (about the output gap in the Russian Federation – see the text next). The assessment is also confirmed by data from the Chinese customs service (China is now the largest trading partner of the Russian Federation and importer of Russian energy resources): Chinese imports from the Russian Federation for the month increased by 7.3% (year-on-year), to $11.9 billion. Exports to the Russian Federation also increased, but less significantly – by 2.6% by March 2023, to $7.6 billion. The total volume of China’s foreign trade again showed negative dynamics: exports decreased by 7.5% year-on-year, imports by 1.9%. Oil supplies to the country remained at a comparable level, both in volume and in money. At the beginning of the year, Chinese trade showed an improvement in performance, but this may be explained by a weaker base in 2023, when the country was just lifting Covid restrictions.

IEA data, in turn, record an increase in crude oil exports from the Russian Federation: in March it increased by 400 thousand barrels per day (b/d) compared to February, while supplies of petroleum products decreased by 200 thousand b/d (the agency reports This is a fall from drone attacks on Russian refineries, as well as repairs and a ban on gasoline exports introduced at the end of February). Prices for export Russian oil on average over the month increased by $1.8 per barrel (to $72.37), discounts to Brent were reduced, and to the Dubai grade, on the contrary, grew, which reflects difficulties with supplies due to increased secondary sanctions – part tankers heading to India were unloaded in China, the IEA writes. The agency now estimates the prospects for global oil demand more modestly: this year it could grow by 1.2 million bpd, next year it could grow even less, by 1.1 million bpd. This process will be accompanied by a decrease in China’s share in overall growth: in 2023, the country provided 79% of the global increase in oil consumption, this year the figure will drop to 45%, next year – to 27%, the IEA expects. At the same time, oil prices continue to rise – Brent exceeded $90 per barrel in early April amid increasing geopolitical risks; the market is also considering the possible consequences of a reduction in supplies of Russian petroleum products.

Tatiana Edovina