Russia's seaborne crude exports fell back last week after surging in the previous seven days, contributing to the smallest inflow into the Kremlin’s war-chest since Moscow sent its forces into Ukraine.

Aggregate volumes of Russian crude slumped by 820,000 barrels a day, or 22%, to 2.98 million in the week to Jan. 20, giving up most of the previous week’s gain. The biggest drops were in flows from the Pacific ports, with smaller declines in Arctic and Black Sea exports. Baltic shipments were stable.

Despite the drop, four-week average flows, which smooth out peaks and troughs in weekly data, edged higher, remaining just above 3 million barrels a day for a second week. By this measure, seaborne crude exports were broadly in line with levels seen for most of the second half of 2022.

Inflows to the Kremlin's war-chest from crude export duties fell sharply, dropping in line with the slump in weekly flows. A revised formula, introduced at the start of 2023, has halved per barrel duty rates and that, combined with the drop in flows, has slashed revenues to the lowest since before the war on both a weekly and four-week average basis. Moscow is considering changes to the way it calculates taxes on oil to boost revenues.

While overall crude flows are holding up in the face of a European ban on seaborne imports from Russia, Moscow will face the new challenge of similar sanctions on its products exports that come into effect on Feb. 5. These will also be accompanied by a price cap, designed to keep volumes flowing to non-European destinations, while restricting the Kremlin’s income.

The weekly data remain highly volatile, depending on the timings of when individual shipments depart and things like weather conditions and work at ports.

Tankers hauling Russian crude are becoming more cagey about their final destinations. Vessels carrying more than 30 million barrels of Russian crude, the equivalent of 1.08 million barrels a day of exports, left port showing no clear final destination in the four weeks to Jan. 20.

Crude Flows by Destination:

On a four-week average basis, overall seaborne exports edged higher by 22,000 barrels a day compared with the period to Jan. 13. At 3.08 million barrels a day, the measure was the highest since November.

All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. These are shipments made by KazTransoil JSC that transit Russia for export through Ust-Luga and Novorossiysk.

The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since the invasion of Ukraine by Russia, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies. Transit crude is specifically exempted from European Union sanctions.

The volume of crude on vessels heading to China, India and Turkey, the three countries that emerged as the only significant buyers of displaced Russian supplies -- plus the quantities on ships that are yet to show a final destination -- edged higher in the four weeks to Jan. 20 to average 2.9 million barrels a day. That’s up by 64,000 barrels a day from the period to Jan. 13, and the highest since Bloomberg began monitoring the flows in detail at the start of 2022.

With most of the ships yet to show destinations likely to end up in India or China, the recent slump in flows to Turkey has been particularly dramatic. Imports from Russia, which rose to almost 400,000 barrels a day in September, slumped to just 47,000 barrels a day over the past four weeks, vessel-tracking data monitored by Bloomberg show. That’s as low as they were before Moscow’s troops invaded Ukraine last February.

  • Asia

Four-week average shipments to Russia’s Asian customers, plus those on vessels showing no final destination, edged higher to 2.8 million barrels a day in the four-week period to Jan. 20 from a revised 2.79 million barrels a day in the same period to Jan. 13.

While the volume heading to India appears to have slumped, history shows that most of the cargoes on ships initially showing no final destination end up there.

The equivalent of almost 650,000 barrels a day was on vessels showing destinations as either Port Said or Suez, or which have already been 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 and show up in the chart below as “Unknown Asia” until a final destination becomes apparent.

The “Unknown” volumes, running at 434,000 barrels a day in the four weeks to Jan. 20, are those on tankers showing a destination of Gibraltar, Ceuta, Malta or no destination at all. Most of those cargoes go on to Asia, but some could end up in Turkey. An increasing number are being transferred from one vessel to another in the Mediterranean for onward journeys through the Suez Canal or on larger vessels around Africa.

  • Europe

Russia’s seaborne crude exports to European countries slipped to 125,000 barrels a day in the 28 days to Jan. 20, the lowest since Bloomberg began tracking the flows in detail at the start of 2022. These figures do not include shipments to Turkey.

A market that consumed more than 1.5 million barrels a day of short-haul 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.

No Russian crude was shipped to northern European countries in the four weeks to Jan. 20.

Exports to Mediterranean countries rose to their highest in five weeks on a four-week average basis. Turkey was the only destination for Russian seaborne crude into the Mediterranean and the country is one of those that boosted imports after the war began. The pick-up in purchases will provide some relief for the Kremlin, though flows remain well below the levels seen in the summer of 2022.

Flows to Bulgaria, now Russia’s only Black Sea market for crude, fell to equal their lowest since August, dropping to 125,000 barrels a day. Bulgaria secured a partial exemption from the EU ban, which should support inflows now that the embargo has come into force.

Flows by Export Location

Aggregate flows of Russian crude fell by 820,000 barrels a day, or 22%, in the seven days to Jan. 20, giving up most of the previous week’s gain. The biggest drops were seen in flows from the Pacific ports, with smaller falls in Arctic and Black Sea exports. Shipments from the Baltic were unchanged.

Figures exclude volumes from Ust-Luga and Novorossiysk identified as Kazakhstan’s KEBCO grade.

Export Revenue

Inflows to the Kremlin's war chest from its crude-export duty fell by $13 million, or 22%, to $48 million in the seven days to Jan. 20, while the four-week average income also fell, dropping by $18 million to $69 million.

The January duty rate is $2.28 a barrel, based on an average Urals price of $57.5 a barrel, according to figures from the Russian Ministry of Finance. The figure will fall further next month, with February’s duty rate set at $1.75 a barrel, the lowest per barrel rate since June 2020, during the depths of the Covid 19 pandemic. The drop is the result of a decline in Urals prices over the mid-December to mid-January measurement period. Russia’s benchmark grade averaged $46.82 a barrel according to ministry figures, a discount of almost $35 a barrel to Brent over the same period.

Origin-to-Location Flows

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

A total of 28 tankers loaded 20.9 million barrels of Russian crude in the week to Jan. 20, vessel-tracking data and port agent reports show. That’s down by 5.7 million barrels, or 22%, 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. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade.

The total volume on ships loading Russian crude from Baltic terminals remained stable from the previous week. It is likely that the ports are being used to handle additional volumes of crude that have been displaced from the northern leg of the Druzhba pipeline that serves Poland and Germany.

Shipments from Novorossiysk in the Black Sea slipped back from the previous week’s level in the period to Jan. 20, with smaller cargoes predominating.

Arctic shipments fell back from the previous week’s two-month high, with two suezmax tankers leaving from Murmansk during the week. With all cargoes now heading to Asia via the Suez Canal, these larger vessels have replaced the aframaxes that were previously used for deliveries from the floating storage units at the port. The Northern Sea Route to China, used for one cargo in October, is likely to remain closed for several months due to ice.

Flows from the Pacific fell back sharply, dropping by almost half from the previous week’s high, with just 6 tankers loading at the region’s three terminals.

Shuttle tankers carrying Sokol crude are now often waiting much longer than they used to before transferring their cargoes to other vessels off the South Korean port of Yeosu, which appears to be slowing shipments of the grade. No vessels loaded at the De Kastri terminal during the week.