Last week saw a recovery in Russia’s seaborne crude flows, with India now making inroads into the country’s Pacific exports after absorbing the majority of cargoes carried from western ports as a result of an embargo by Europe, as reported by Bloomberg.
Dip in exports
Up to 3.33 million barrels per day in the seven days leading up to March 10, Russia’s shipments made up 40% of the deficit from the previous weeks. The less erratic four-week average increased as well.
Since its soldiers invaded Ukraine more than a year ago, there hasn’t been a noticeable dip in Russia’s seaborne exports, though there may have been a general decrease in flows as a result of tankers accepting some crude that had previously been delivered to Europe via the Druzhba pipeline. There is currently no indication that the 500,000 barrels per day output cut that Russia promised to implement in March will have an impact on flows.
Seaborne Crude
Russia’s seaborne crude shipments
Beginning in early November, India surpassed China as the largest consumer of Russian seaborne oil, and it has since kept up that trend. After months in which Chinese refiners snatched up nearly every shipment of the Pacific ESPO crude grade that was available, increasing amounts of the oil are now making their way to India’s ports.
Russia’s Biggest Buyers
Seaborne crude shipments to India continue to outstrip sales to China
Those with knowledge of the situation claim that India would not violate Western sanctions against Russia, including the $60 per barrel price cap set on purchases of oil from Moscow. They claim that the authorities have instructed banks and dealers to abide by the guidelines.
In the most recent four-week period, the total amount of oil flowing on ships to China and India, as well as smaller flows to Turkey and amounts on ships that haven’t yet indicated a final destination, rebounded to an average of 3.28 million barrels per day, setting a new high.
As the ultimate destinations of goods embarking in late January and early February become evident, flows to China climbed to new post-invasion highs. Most of the shipments labelled as coming from “Unknown Asia” and bound for the Suez Canal, according to historical trends, are likely to arrive in India.
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Source: Bloomberg
