Vortexa market analysts have undertaken a review of Russian crude oil seaborne exports and identified the destinations and modifications to the supply chain
The invasion of Ukraine by Russia came at a time of relatively low crude oil demand, with February 2022 having the lowest level of Chinese net crude oil imports since the start of the Covid pandemic, noted Voxtexa.
Crude oil demand globally is weak and OPEC supply is also at recent historic levels, reported Vortexa chief economist David Wech in a weekly broadcast.
Turning to Russian seaborne oil exports (crude oil and products), the four-week average trend to 17 April 2022 recorded by Vortexa shows a decline since the invasion in February and a decline year-on-year. “There is a downward trend since early March (2022), but this has come to halt over the last couple of weeks,” said Mr Wech.
He noted support was coming from stronger crude oil exports and residual and fuel oil exports.
Vortexa lead crude analyst Jay Maroo provided detail on Russia’s crude oil exports from the Black Sea and Baltic, “There is a marked rise in crude (oil) exports from these two regions on a four-week rolling basis,” he said, “There is a big shift in cargoes heading toward Asia, likely India and China.”
He added, “There has also been a massive climbdown in (crude oil) heading towards Baltic refiners.”
This was due to the self-sanctioning taking place among refineries in the Baltic, but he added, self-sanctioning is proving to be a challenge where Russian crude oil is blended with Kazak origin crude oil, the so called CPC Blend.
This is still making its way to Europe. “Clearly, European buyers are not that adverse to purchasing CPC Blend,” said Mr Maroo, “If anything, Asia has lost a little bit of a market share.”
Is Europe shunning Russian crude oil? There are two trends emerging, noted Mr Maroo.
“There has been a sharp drop in exports to the Baltic,” said Mr Maroo, with the Netherlands, Germany, Poland, Finland, Lithuania and others shunning Russian crude oil in March and so far in April.
He added this may be as far as self-sanctioning can go before more concrete political action is taken.
The second trend is that Russian crude oil exports to Black Sea and east Mediterranean refiners has been rising. “A key component is rising flows to Turkey, but also Romania and Bulgaria.”
He noted that refineries in Romania and Bulgaria have elements of Russian ownership, suggesting that crude oil flows in the region will persist.
Vortexa is tracking the export of Russian crude oil on a daily basis and in the presentation highlighted three VLCCs that had undertaken the loading of Russian crude oil via ship-to-ship transfer (STS) and are believed to be heading for Asia: Nissos Rhenia, Searacer and Pertimina Prime.
Vortexa noted there are also a further six Aframax tankers that have loaded Russian crude oil in the Baltic and are believed by Vortexa to be heading to transfer via STS to VLCCs waiting off Gibraltar, Malta and Skaw.
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