Russian oil exports hit high after invasion

Russia exported more oil in April than in any month since its outright invasion of Ukraine last year, with China and India accounting for nearly 80 percent of crude exports, according to the International Energy Agency.

Russian oil exports rose by another 50,000 b/d in April to a post-invasion high of 8.3mn b/d, up from 7.7mn b/d and 7.5mn b/d expected in 2022 and 2020, respectively. respectively in 2021 was average. ,

The rise in shipments reflects Moscow’s success in finding new buyers for its oil after Europe blocked imports and new ships to transport cargo to those markets.

Since the West first threatened Russia with sanctions last year, Moscow has worked with a growing number of small-trade companies and tanker-owners to develop new systems to move its oil.

“Russia appears to have some problems finding willing buyers for its crude and oil products,” the IEA said in its monthly oil report on Tuesday.

This has resulted in one of the biggest shifts in commodity flows ever recorded, with Russia re-routing millions of barrels of oil per day from Europe to Asia over the past 12 months.

Despite shipping more oil, Russia’s monthly oil export revenue was down 27 percent from April 2022, according to IEA projections, partly due to lower global energy prices.

Russian oil is also trading at a discount to global benchmarks due to G7-led price caps on Russian exports of oil and refined petroleum products allowed in December and February respectively.

However, this exemption is starting to erode, the IEA said, as Russia increases its access to non-Western shipping that is able to operate outside the price cap. According to IEA estimates, Moscow’s oil export revenue rose from $13.3 billion in March to $15 billion in April.

Overall, Russia exported 5.2 million bpd of crude oil in April, the most since May 2022, including 2.1 million bpd to China and 2 million bpd to India. The total export of refined petroleum products was 3 million b/d.

“New refining capacity is driving a sustained shift to the east in crude oil price forecasts for the remainder of the year, reflecting the strength of regional demand,” the IEA said.

The IEA said imports from Russia had helped meet rising oil demand in China, which hit a high of 16 million bpd in March. “The recovery in China’s demand continues to exceed expectations,” it said.

In response, the IEA raised its forecast for 2023 global oil demand growth to 2.2mn b/d, adding that China would account for about 60 per cent of the increase.

The plunge in global oil prices in April and early May, when Brent crude, the global benchmark, fell nearly $16 a barrel in just two weeks was “quite the opposite” of the tight market expected in the second half of the year, it said.