Russia's crude exports hit lowest since February: What's the reason?
What's the story
Russia's crude oil exports have declined to their lowest level since February, as refinery runs are increasing at faster rate than production. According to Bloomberg's tanker-tracking data, seaborne crude shipments averaged 3.12 million barrels per day in the four weeks ending July 6. This is a 3% decline from the previous period ending June 29, and a drop of about 200,000 barrels per day from March levels before eight OPEC members including Russia began easing output cuts made in 2023.
Production details
Production increased by 60,000 barrels per day
Over the same period, Russia's production increased by some 60,000 barrels per day. This is one-third of the headline increase in the country's OPEC output target. However, refinery runs rose by a whopping 140,000 barrels per day. The increases in output permitted to Russia under the OPEC agreement are limited by deeper cuts it pledged to compensate for past over-production.
Export trends
Weekly shipments saw a spike
The decline in Russia's exports highlights the widening gap between OPEC's large headline output increases and the much smaller additional volumes actually reaching the international market. However, unlike four-week average numbers, weekly shipments saw a spike of about 280,000 barrels per day to a four-week high, after two weeks of particularly low exports. This jump followed two weeks of particularly low exports, which were partly due to maintenance work at Russia's largest Pacific export terminal.
Price fluctuations
Weekly average export costs of Russian crude fell
In the week ending July 6, a total of 30 tankers loaded 22.96 million barrels of Russian crude. This was an increase from the previous week's 21 million barrels on 28 ships. However, the weekly average export prices of Russian crude fell for a second consecutive week, dropping even more sharply than the wider market.