August Russian oil exports at lowest level in 3 years

Russian oil exports in August 2024 decreased by 290,000 b/d month-over-month (m-o-m) to 7 million b/d, according to analysis from the International Energy Agency (IEA), based on trade data from Kpler and Argus Media. This marks the second consecutive month of decline and the lowest level since March 2021.

Russian crude exports suffered a seasonal 270,000 b/d m-o-m contraction to 4.4 million b/d (-270,000 b/d year-over year, y-o-y). By contrast, product exports were relatively stable (-20,000 b/d y-o-y) at 2.65 million b/d, despite the summer demand uptick and stagnant refinery runs.

Specifically, a 240,000 b/d fall in light product exports (naphtha, gasoline plus gasoil) offset a 230,000 b/d rise in fuel and VGO (Vacuum Gas Oil) loadings, reflecting conversion unit outages following drone attacks, IEA said. Lower volumes and prices combined to cut August commercial export revenues by $1.6 billion m-o-m to $15.3 billion, a level not seen since July 2023. Products revenue declined by $480 million to $5.6 billion and crude by $1.2 billion to $9.6 billion.

“Available data does not clarify if August’s unusually deep drop in Russian crude exports reflects efforts to meet OPEC+ production cut obligations or simply heavier field maintenance. Almost 230,000 b/d of August seaborne crude exports had no identified destination as of the time of writing, limiting the accuracy of estimating volumes by destination,” IEA said.

“For July, while some 70,000 b/d of shipments still have no destination, the 460,000 b/d m-o-m drop in exports mainly impacted India (-310,000 b/d) and Türkiye (-190,000 b/d). Exports to both countries fell in anticipation of forthcoming refinery maintenance that will intensify in September and may have undermined demand for Russian exports in August,” IEA continued.

Urals export prices dropped by $3.50-4.00/bbl over the month to $68.30/bbl, narrowing the gap to the G7 price cap. This decline, however, trailed the decline in North Sea Dated crude, indicating better valuations for sour crudes compared with sweet ones in the international market.

Meanwhile, discounts versus Dubai for Urals delivered West Coast India narrowed further, averaging just -$0.69/bbl in August, hitting parity on a couple of successive days and denting competition with Middle East grades.