In December, export prices for Russian Urals oil at Baltic ports fell by $2.4 to $41.16 per barrel, while at Black Sea ports the decline was $2.8 to $38.28 per barrel. The spread between Urals and the benchmark Brent oil widened to $25.8 per barrel, which is more than double the level recorded before the latest package of U.S. sanctions was imposed. Meanwhile, the price of the Far Eastern ESPO grade dropped by $1.6 to $52.36 per barrel.
This is reported by Finway
Record Volumes of Russian Oil Remain at Sea
To compensate for the price drop, Moscow is increasing the volume of maritime shipments. In the first week of December, 38 tankers loaded 29.65 million barrels of oil, exceeding the previous week’s figures (35 tankers and 27.61 million barrels). The average daily maritime export rose to 4.24 million barrels, the highest level since the start of the full-scale aggression against Ukraine.
However, an increasing amount of oil is not reaching end consumers and is accumulating at sea. Over the past two weeks, the volume on tankers has increased by 20 million barrels, and currently, a record 180 million barrels of Russian oil remain unloaded. U.S. sanctions pose risks to Russian oil exports — the country could lose 1.2 to 1.4 million barrels of daily exports.
“The convoluted journey of Rosneft’s cargo, which lasted 11 weeks (a month longer than usual), demonstrates the uncertainty that sanctions have created for Russian oil exports. Buyers are trying to avoid heightened scrutiny from Washington.”
Situation in Key Markets: India and China
On December 9, the tanker Fortis, carrying 700,000 barrels of Rosneft oil, anchored near the Chinese port of Zhichao, having departed from the Ust-Luga port on September 22. Due to the inclusion of most of the port’s import terminals in the U.S. blacklist, it remains unclear whether Fortis will be able to unload.
In India, four out of the seven largest oil refining companies are currently actively purchasing Russian oil, taking advantage of attractive discounts and seeking “non-sanctioned” barrels. At the same time, major players are avoiding risky deals, wary of sanctions pressure.
Amid falling sales and reduced refining capacities due to Ukrainian attacks, in November, Moscow produced 100,000 barrels less per day than the OPEC+ target. Traditionally, Russia has occasionally exceeded the oil cartel’s quotas, but the current situation is forcing a downward adjustment in production.