Record-Breaking Seaborne Oil Exports from Russia
- Shams ul Zoha
- January 18, 2023
- 5:45 pm
WHAT YOU SHOULD KNOW
- Bloomberg recently reported that Russia’s seaborne oil exports have risen to their highest levels since April, with an increase of 876,000 barrels per day.
- The majority of the growth in shipments is seen in Russia’s Baltic ports, but there are also increases in its Black Sea and Pacific ports.
- The disparity between the prices of Russia’s Urals oil and the benchmark Brent oil has grown, with Neste reporting that the discount of Urals to Brent has grown to $32.26.
Oil traders are currently paying close attention to the latest Bloomberg report, which has revealed that Russia’s seaborne oil exports have risen to their highest levels since April. The report indicated that Russia’s seaborne exports increased by 876,000 barrels per day, bringing the total to 3.8 million bpd.
The majority of Russia’s growth in shipments was seen in its Baltic ports, however, there was also a noticeable increase in the number of shipments from its Black Sea and Pacific ports.
Recent evidence suggests that the disparity between the prices of Russia’s Urals oil and the benchmark Brent oil has grown. This data may provide an explanation for this trend.
Neste recently reported that the discount of Urals to Brent has grown to $32.26. Its data is derived from the average of the last five days, so it is possible that the current discount is larger than what is indicated.
The Urals discount has been hovering around the $37 mark since April, and if Russia’s exports continue to rise, it is likely that this level will be tested again in the near future
In December, Russia declared its readiness to reduce its production in order to dodge the price ceiling put in place by Western nations.
Last week, the Russian energy ministry announced that it was developing strategies to reduce the amount of discounts it offers to global standards.
Due to a lack of adequate maritime vessels, Russia must turn to transportation companies to move its exported oil, even though these companies are exposed to potential risks from sanctions. Buyers of Russian oil are requesting discounts as the market continues to evolve.
The transportation issues and the limited pool of prospective buyers have caused Urals oil to be sold at a reduced price when exported through Russia’s Baltic ports. The question of whether Russia is willing to reduce its oil production in the near future is still unanswered.
It is possible that the oil market could be under greater stress if Russia continues to export oil at current high levels.
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