- Floating glut hits 2.5-year high.
- Prices fall, export revenues stagnate.
- India’s imports are seen dropping sharply.
Russia is ramping up its crude oil shipments onto tankers at an unprecedented rate, but many of these shipments are having a tough time finding buyers. Delays in offloading and longer travel times, particularly as cargoes are redirected towards China, have led to a record high of Russian oil volumes stranded at sea, the highest in two and a half years, reports gCaptain.
Floating Glut Pressures Prices
The amount of oil stored on tankers has surged by about 28% since late August. This increasing surplus is putting downward pressure on crude prices and limiting the revenue that Moscow can generate to support its war efforts in Ukraine.
Seaborne Exports Hit Post-Invasion High
In the four weeks leading up to December 7, Russia exported around 3.68 million barrels per day, which is an increase of roughly 220,000 barrels compared to the previous period. Weekly shipments have reached their highest levels since February 2022, thanks to robust loadings from Black Sea and Pacific ports.
Revenues Flat Despite Higher Volumes
Despite the uptick in export volumes, falling prices have countered any potential revenue gains. The four-week average value of seaborne exports has remained steady at about $1.14 billion a week. Prices for Urals crude and ESPO have dipped to their lowest points since the war began, with Urals discounts widening significantly.
India Demand Under Pressure
India, which is Russia’s largest buyer of seaborne oil, is anticipated to reduce its imports to levels not seen in nearly four years early next year, largely due to pressure from the US. How long this pullback lasts will depend on possible workarounds and the progress of US–India trade discussions.
Attacks Add to Supply Risks
Ukraine continues to target Russian refineries and export facilities, while Russia intensifies its attacks on Ukraine’s energy infrastructure. With no peace resolution in sight, supply disruptions are likely to continue.
Tanker Loadings Jump Week by Week
In the week leading up to December 7, 38 tankers loaded nearly 29.7 million barrels of Russian crude, a rise from 27.6 million barrels the week before. Daily shipments averaged around 4.24 million barrels, marking the highest level since the invasion began.
Prices are Dropping Across the Board
Over the past four weeks, Baltic Urals prices have dipped to about $41 a barrel, while Black Sea cargoes are now around $38, and ESPO is hovering near $52. Additionally, delivered prices to India have reached new lows for the post-2023 timeframe.
Asia’s Oil Flows Increase, but Destinations Are Unclear
Shipments heading to Asia have risen to 3.46 million barrels per day, marking the highest level since mid-2023. However, there’s a noticeable trend of fewer tankers providing clear destination information, with many opting to delay disclosure or change course mid-journey.
More Oil, But No Buyers in Sight
The amount of crude oil on ships without a specified destination has now surpassed the total volumes being sent to China, India, or Turkey. Stricter US sanctions could leave more Russian oil stranded at sea unless new solutions are found.
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Source: gCaptain
