Oil buyers in southern Europe are quietly returning to the market for Russian crude, with a European Union ban on such shipments still four months away from coming into force.

Shipments of Russian crude to ports in Italy and Turkey rose to multi-week highs in the seven days to Aug. 5, offsetting another drop in shipments to customers in northern Europe, according to vessel-tracking data monitored by Bloomberg. Shipments from Russia to the Mediterranean region as a whole were the highest since mid-June.

Deliveries of crude from export terminals in the Baltic and Black Sea to refineries in Italy rose to a seven-week high, while shipments to Turkey were the biggest in six weeks. Spain took its first cargo of Urals crude since April, with a shipment belonging to Kazakhstan’s KazTransOil delivered to Bilbao. Last week also saw the first Urals shipment from the Baltic to Greece since February.The increased flows to several European countries ahead of sanctions coming in to effect highlight the difficulty the region will have in ending its reliance on Moscow's oil. The identification of some of those cargoes as non-Russian, even though they are a Russian grade shipped from a Russian port, shows just how difficult it will be to police the sanctions when they do come into effect in December.

Russia’s seaborne crude shipments have stabilized at a level about 500,000 barrels a day below the peak they reached after Moscow’s troops invaded Ukraine in late February and remain little changed from where they were before before the attack. Outflows edged lower in the week to Aug. 5, slipping to 3.46 million barrels a day from 3.51 million the previous week, according to vessel-tracking data monitored by Bloomberg. Still, four-week average shipments, which smooth out some of the volatility in weekly figures, rose to the highest in four weeks at 3.25 million barrels a day. 

Based on current destinations, the average flow of Russian crude to Asia remained close to 1.75 million barrels a day, down from a plateau of more than 2.1 million barrels a day in April and May. Shipments to European buyers including those in northern Europe, the Mediterranean and the Black Sea region rose to a five-week high of 1.38 million barrels a day, but they are still down from more than 1.85 million barrels a day before the invasion.

Inflows to the Kremlin's war chest from crude export duty continue to increase, with four-week average income rising to an 11-week high. The gain comes even as many of the most recent week’s shipments were assessed for duty at the lower rate prevailing in August.

Crude Flows by Destination:

• Asia

The volume of crude on tankers heading for Asian destinations was virtually unchanged in the four weeks to Aug. 5, but the volume destined for undisclosed destinations in the region rose to 271,000 barrels a day. Most of the tankers carrying that crude are signaling the Suez Canal as their destination.

• Europe

The volume shipped from Russia to northern Europe in the four weeks to Aug. 5 fell to one-quarter of what it was before Russia invaded Ukraine, averaging 317,000 barrels a day.

Shipments to Mediterranean buyers rose for a second week to equal the highest level seen in seven weeks. Flows to Italian and Turkish ports both increased.

Combined shipments to Bulgaria and Romania rose to three-week high of 255,000 barrels a day in the four weeks to Aug. 5.

Flows by Export Location

Aggregate crude flows from Russian ports edged lower by 50,000 barrels a day, or 1%, in the seven days to Aug. 5. Flows were lower than during the previous week from the Baltic and Black Sea, but more was shipped from the Arctic and Pacific.

Export Revenue

Moscow’s revenue from export duty fell by $8 million, or 4%, to $177, according to calculations by Bloomberg. The drop in revenue was bigger than that in volume because most of the cargoes were shipped in August, when they attracted a lower rate of export duty.

Origin-to-Location Flows

The following charts show the number of ships leaving each export terminal and the destinations of crude cargoes from each of the four export regions.

A total of 34 tankers loaded 24.2 million barrels from the country’s export terminals in the week to Aug. 5, vessel-tracking data and port agent reports show. That’s down by 340,000 barrels from the previous week. Destinations are based on where vessels signal they are heading at the time of writing, and some will almost certainly change as voyages progress.

The total volume of crude on ships loading from Russia’s Baltic terminals edged lower, giving up the gain seen the previous week.

Flows from Novorossiysk in the Black Sea fell back after the previous week’s jump, with flows to Asian countries dropping by half.

Arctic shipments rose to equal their highest level since Russian troops invaded Ukraine, with an increase in the volume heading to India.

Crude flows from Russia’s eastern oil terminals rose to their highest since mid-April, driven by an increase in shipments of ESPO crude from Kozmino.