Moscow, 9 January 2024 (TDI): In the initial days of 2024, Russia has commenced its seaborne crude shipments in strict accordance with its commitment to curtail exports. This move is part of the broader OPEC+ initiative aimed at stabilizing the global oil markets.
According to tanker-tracking data, around 3.34 million barrels of crude were transported from Russian ports during the four weeks leading up to January 7. This marked a decrease of 120,000 barrels per day compared to the period ending on December 31.
The weekly average, known for its higher fluctuations, experienced a decline of 500,000 barrels per day, reaching 3.28 million. This figure was 300,000 barrels lower than the average export level observed by Bloomberg in May and June – the baseline period chosen by Moscow. This reduction aligns with Russia’s commitment to OPEC+ partners, aiming to lower crude exports in the first quarter of 2024.
In response to broader OPEC+ developments, Russia has announced its intention to deepen oil export cuts by 500,000 barrels per day below the May-June average during the initial quarter.
This decision follows Saudi Arabia’s commitment to extend its independent one-million barrel-a-day supply reduction, accompanied by additional output curbs by several other OPEC+ members. The Russian reduction will be distributed between crude shipments, facing a cut of 300,000 barrels per day, and refined products.
The recent four-week average for crude measures approximately 245,000 barrels per day below the May-June benchmark, reflecting Moscow’s efforts to align with OPEC+ agreements and stabilize global oil markets.
Despite ongoing attacks on merchant vessels by Yemen-based Houthi rebels, all Russian crude intended for Asian buyers, loaded at western ports, still traverses the Red Sea. While tankers transporting Moscow’s oil are not a direct target, there remains a potential risk of accidental incidents, raising concerns about the safety of ships carrying Russian supplies through the region.
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It seems that Russia is having difficulty placing its Sokol crude cargoes. In December, six ships that were en route to the ports of Paradip and Vadinar stopped and turned around before retracing their route across the Strait of Malacca. Although three of the tankers indicated that they were headed to Qingdao, China, they have already made a second stop in the South China Sea.
There are currently four other Sokol cargoes on board ships that are also displaying Indian ports. They also don’t appear to be planning on going to their assigned locations.
Based on weekly shipping and pricing data, the gross value of Russia’s oil exports decreased to $1.45 billion in the seven days leading up to January 7 from $1.73 billion the week before. The average income over a four-week period also declined, falling to $1.5 billion each week from $53 million.