Russian Crude Exports Unfazed by Sanctions, But Offloading Delays Emerge

Despite the latest US sanctions targeting Russian oil, crude exports have remained stable. However, the completion of shipments is facing challenges as restrictions hinder the offloading of cargoes.

Delayed Discharges in the Pacific

In the Pacific, only two out of nine cargoes shipped post-sanctions from the Sakhalin Island oil and gas projects have discharged. Four others are anchored near the Russian port of Nakhodka, while one has been stranded between Japan and South Korea since January 17. The remaining two have yet to reach their intended destinations.

With only 10 specialized tankers available for hauling these grades, a prolonged delay in releasing these vessels could disrupt shipments.

ESPO Grade Circumvents Restrictions

Key Pacific grade ESPO continues to move thanks to unsanctioned vessels replacing those targeted by the US. Of 27 cargoes loaded between January 10 and February 2, only two were assigned to sanctioned ships. Neither has attempted to discharge their cargo yet.

Arctic Shipments Bound for India

The first post-sanctions cargo from the Arctic port of Murmansk entered the Mediterranean on Sunday and is headed for the Suez Canal. Shipping data suggests it will arrive off the west coast of India in approximately two weeks. India has indicated it will not accept cargoes on sanctioned vessels after a deadline this month.

Floating Storage Buildup

If receiving terminals refuse Russian oil, floating storage will rapidly accumulate. One post-sanctions cargo from Murmansk is already heading towards OPL Oman, a potential storage site.

Overall Crude Shipments

In the week ending February 2, 29 tankers loaded 21.61 million barrels of Russian crude, down slightly from the previous week's 22.5 million barrels. Daily crude flows declined by 130,000 barrels, or 4%, to 3.09 million.

Kazakhstan's KEBCO Exports

Two cargoes of Kazakhstan's KEBCO crude were also loaded during the week.

Export Value Declines

The value of Russian crude exports fell by $110 million to $1.39 billion in the week ending February 2 due to both sanctions and a decrease in crude prices.

Exports by Destination

Observed shipments to Asia rose to 2.68 million barrels a day in the four weeks ending February 2, but remain below October's peak. Turkey remains the only short-haul market for western Russian ports.

Notes

This report excludes Kazakhstan's KEBCO grade and is based on vessel-tracking data, port agent reports, and information from Kpler and Vortexa.