Russia’s oil flows are climbing steadily as Moscow’s adherence to a pact with Saudi Arabia to keep barrels off the global market shows signs of waning.

About 3.53 million barrels a day of crude was shipped from Russian ports in the week to Oct. 22, an increase of 20,000 barrels a day from the previous seven days, tanker-tracking data monitored by Bloomberg show. That lifted the less volatile four-week average to 3.5 million barrels a day, the highest since June, and up by about 610,000 barrels a day in the past two months.

The small weekly gain reflected increases in flows from the Baltic and Pacific, which more than offset a drop in shipments from the Black Sea.

Deputy Prime Minister Alexander Novak said in early August that Moscow would prolong export restrictions at a reduced level of 300,000 barrels a day below their May-June average until the end of the year. Bloomberg calculations indicate that shipments through ports should be running now at about 3.28 million barrels a day.

Four-week average volumes have been rising relative to the reduced shipments target since the start of September, exceeding it by about 220,000 barrels a day in the most recent period.

The increase in volumes raised the Kremlin’s weekly revenues from oil export duties to a new high for the year, while the four-week average rose for a 12th straight week, setting a new high for the period since mid-January.

One of two vessels sanctioned by the US Treasury for carrying Russian cargoes in breach of a price cap earlier in the year has been allowed to discharge its latest, non-Russian, cargo at Houston and depart the port, tanker-tracking and US customs data show.

The recovery in Russia’s oil refining rate ground to a halt last week, with runs up just 10,000 barrels a day in the seven days to Oct. 18 from the previous week. Analysts expect the next surge in processing volumes by mid-November, when more plants will complete seasonal maintenance.

Flows by Destination

Russia’s seaborne crude flows edged higher in four weeks to Oct. 22 to average 3.5 million barrels a day. That’s the highest since the four weeks to June 25 and up from 3.36 million barrels a day in the period to Oct. 15. Shipments remain about 85,000 barrels a day below the average seen during the surge in volumes between April and June.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through Novorossiysk and the Baltic port of Ust-Luga and are not subject to European Union sanctions or a price cap.

The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies. 

  • Asia

Observed shipments to Russia’s Asian customers, including those showing no final destination, rose for a fourth week. Flows edged higher to 3.06 million barrels a day in the four weeks to Oct. 22, from 2.95 million barrels a day in the period to Oct. 15. That’s still well below a peak of about 3.6 million barrels a day seen in May. 

Flows to India remain well below their peak levels seen earlier this year. If all of the cargoes on ships without an initial destination eventually end up in India, shipments to the country will be about 285,000 barrels a day, or 14%, down from their May high. Adding the “Unknown Asia” and “Other Unknown” volumes to the total for India gives a figure of 1.8 million barrels a day in the four weeks to Oct. 22. That’s the most in 18 weeks, but down from a high of 2.15 million barrels a day in the period to May 21.

India is rejecting pressure from Russian oil suppliers to pay for crude imports in Chinese yuan as tensions between New Delhi and Beijing continue to simmer.

The equivalent of about 350,000 barrels a day was on vessels signaling Port Said or Suez in Egypt, or are expected to be transferred from one ship to another off the South Korean port of Yeosu. Those voyages typically end at ports in India or China and show up in the chart below as “Unknown Asia” until a final destination becomes apparent.

The “Other Unknown” volumes, running at about 230,000 barrels a day in the four weeks to Oct. 22, are those on tankers showing no clear destination. Most of those cargoes originate from Russia’s western ports and go on to transit the Suez Canal, but some could end up in Turkey. Others could be moved from one vessel to another, with most such transfers now taking place in the Mediterranean, off the coast of Greece.

Pakistan Refinery Ltd. has signed a long-term supply deal with Russia under which it will receive as much as 75,000 tons of crude oil a month, equivalent to about 18,000 barrels a day. The first cargo is due to arrive in December.

  • Europe and Turkey

Russia’s seaborne crude exports to European countries have collapsed since Moscow’s troops invaded Ukraine in February 2022. A market that consumed about 1.5 million barrels a day of short-haul seaborne crude, coming from export terminals in the Baltic, Black Sea and Arctic has been lost almost completely, to be replaced by long-haul destinations in Asia that are much more costly and time-consuming to serve.  These figures do not include shipments to Turkey.

No Russian crude was shipped to northern European countries, or those in the Mediterranean in the four weeks to Oct. 22.

Flows to Bulgaria, now Russia’s only European market for crude, fell to equal a 19-week low of about 104,000 barrels a day. Litasco SA, the main shareholder of a refinery at Burgas, has  denied being in any negotiations to sell the plant after the country’s Prime Minister Nikolai Denkov said various potential buyers have for months expressed an interest in purchasing the refinery.

Exports to Turkey jumped to about 340,000 barrels a day in the four weeks to Oct. 22. That’s the highest in almost a year. Flows had topped 425,000 barrels a day in October 2022, before falling sharply after a Group of Seven price cap came into effect in early December. The jump in flows comes after Lukoil resumed deliveries to the Azerbaijani-owned Star refinery at Aliaga. Supplies are expected at about 100,000 barrels a day, equivalent to half of the refinery’s capacity.

Vessel-tracking data are cross-checked against port agent reports as well as flows and ship movements reported by other information providers including Kpler and Vortexa Ltd.

Export Revenue

Inflows to the Kremlin's war chest from its crude-export duty edged higher to $80.5 million in the seven days to Oct. 22, while four-week average income jumped to $77.8 million. The four-week average set a new high for the period since mid-January. Rising oil prices and the rebound in flows are both contributing to the increase in receipts.

The duty rate for October has been set at $3.26 a barrel, based on an average Urals price of $77.03 during the calculation period between Aug. 15 and Sept. 14. That was $11.60 a barrel below Brent over the same period. October’s duty rate sets a new high for the year. The rate for November has been set at $3.57 a barrel, based on an average Urals price of $83.35 during the calculation period between Sept. 15 and Oct. 14. That was about  $7.70 a barrel below Brent over the same period. November’s duty rate sets a new high for the year.

Origin-to-Location Flows

The following table shows the number of ships leaving each export terminal.

A total of 33 tankers loaded 24.71 million barrels of Russian crude in the week to Oct. 22, vessel-tracking data and port agent reports show. That’s up by about 110,000 barrels from the previous week.

A jump in shipments from Primorsk in the Baltic was more than offset by a drop in the number of vessels leaving nearby Ust-Luga and Novorossiysk in the Black Sea.

Destinations are based on where vessels signal they are heading at the time of writing, and some will almost certainly change as voyages progress. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade.

In addition, two cargoes of KEBCO were loaded at Novorossiysk and one at Ust-Luga during the week.