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Russia explores alternate markets to pump its crude

Europe’s ban on seaborne Russian oil imports from Dec. 5 has prompted Moscow to divert its crude flows to Asia and failed to curb Russian supplies, according to traders and data from Refinitiv Eikon.
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Supplies of oil from Russia and Kazakhstan from the Baltic Sea ports of Ust-Luga and Primorsk rose in the first half of January to 3.4 million tonnes from 2.5 million tonnes in the same period of December.

That includes 3.1 million tonnes of Russian oil, up 35% from 2.3 million tonnes in the corresponding period of December, according to the sources and data.

Exports of Russian oil from these ports to Asia Jan. 1-15 increased by 27% to 2.8 million tonnes from 2.2 million Dec. 1-15.

Russia has been diverting its trade away from the European Union to other markets, mainly in Asia and Latin America, amid a deep political rift with Europe over Ukraine, unseen even in the Cold War era.

The main buyers of Russia’s flagship Urals oil blend in January have remained India and China, according to the market sources.

The sources said the emergence of new logistical schemes, including ship-to-ship (STS) transfers and the use of VLCC tankers, is also likely to improve profitability of such exports.

At least four Chinese-owned supertankers are shipping Urals crude to China, according to trading sources and tracking data, as Moscow seeks vessels for exports after a G7 oil price cap restricted the use of Western cargo services and insurance.

Urals supply to India by Aframax vessels was at least 1.5 million tonnes Jan. 1-15, slightly below the 1.7 million tonnes seen in the same period in December.

Direct shipments to China by Aframax vessels are expected at 200,000 tonnes in the first half of January, according to the data, while there was no corresponding data for such supplies in the same period in December.

Some 500,000 tonnes of additional Urals from the Baltic Sea that was loaded Jan 1-15 will be shipped towards the Suez Canal for Asia, though the final destination has not been established.

Oil supplies for STS operations for further deceivers to Asia on Jan. 1-15 rose to 600,000 tonnes from 500,000 tonnes in the corresponding period of the previous month.

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