Russian Oil Prices Plummet and Accumulate on Tankers Due to Sanctions
At the beginning of December, export prices for Urals oil at Baltic ports dropped by $2.4, reaching $41.16 per barrel, while at Black Sea ports they fell by $2.8, settling at $38.28 per barrel. The price difference between Russian Urals and North Sea Brent increased to $25.8 per barrel, which is double the figure prior to the latest US sanctions package. The price of the Far Eastern ESPO grade also decreased by $1.6, to $52.36 per barrel.
This is reported by AgroReview
Record Volumes of Oil Remain at Sea
Russia is trying to offset losses from the price collapse by increasing export volumes. During the first week of December, 38 tankers loaded 29.65 million barrels of oil, more than the previous week (35 vessels and 27.61 million barrels). The average daily maritime export rose to 4.24 million barrels (+290,000 barrels), reaching the highest level since the beginning of the full-scale invasion of Ukraine.
At the same time, more oil is accumulating at sea: over two weeks, another 20 million barrels were stored on tankers, bringing the total volume of Russian oil at sea to a record 180 million barrels. Due to US sanctions, Russia risks losing between 1.2 to 1.4 million barrels of daily exports.
Sanctions Complicate Delivery and Sale of Russian Oil
On December 9, the tanker Fortis, carrying sanctioned oil from Rosneft (about 700,000 barrels), stopped near the Chinese port of Zhichao after an 11-week journey, which took a month longer than usual. The fate of the cargo remains uncertain, as the vast majority of the port’s terminals are under US sanctions. This situation illustrates the difficulties that restrictions create for Russian exports and compel buyers to avoid attracting Washington’s attention.
“The convoluted journey of Rosneft’s cargo, which lasted 11 weeks (a month longer than usual), demonstrates the uncertainty that sanctions have created for Russian oil exports. Buyers are trying to avoid heightened scrutiny from Washington.”
Four out of the seven largest oil refining companies in India are actively purchasing Russian oil despite the sanctions, taking advantage of significant discounts and seeking so-called “non-sanctioned” barrels.
Amid declining demand and reduced refining capacities due to attacks from Ukraine, in November, oil production in Russia fell short of target figures by 100,000 barrels per day, and the country did not meet the quota set by OPEC+. Previously, Russia had repeatedly exceeded the oil cartel’s limits, but the situation has now changed.