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Russia notched record-high oil sales last week despite sanctions and production cuts

Russia oilA worker checks a pressure gauge at an oil pumping station near the Rosneft company owned Suzunskoye oil field, north from the Russian Siberian city of Krasnoyarsk, March 26, 2015.

REUTERS/Sergei Karpukhin

  • Russia saw record oil sales last week as the nation ships more crude despite sanctions and promised cuts.
  • Oil exports rose to 4.13 million barrels a day in the last week of March, Bloomberg reported.
  • Still, experts say Russia’s economy is at risk as it isolates itself from global markets.

Russia’s oil sales notched a new record last week, despite western sanctions and promises of reductions in output. 

Russian oil exports rose to 4.13 million barrels a day in the last week of March, up 1 million barrels a day from the prior week, according to Bloomberg data. It marks Russia’s highest seven-day shipment volume ever, taking the nation’s four-week average shipment volume to 3.45 million barrels a day, its highest level since June of last year. 

Russian seaborne oil exports have been rising since the beginning of 2023, largely due to halted pipeline oil flows to Germany and Poland. Russian crude oil headed to Germany was completely halted late last year, and flows to Poland plunged to just 60,000 barrels a day on the Druzhba pipeline, leaving Russia with about a half million extra barrels of crude to sell through its sea ports, Bloomberg reported.

Russia has also followed through with its earlier vow to ship more oil to its allies, which has also contributed to growing seaborne exports. Oil shipments headed to China, India, Turkey, and ships that don’t show a final destination – which often end up in China or India, Bloomberg said – notched a new record of 3.29 million barrels a day last month. 

That comes despite a flurry of western sanctions in the past year intended to crimp Russia’s oil revenue, such as the European Union ban and $60 price cap on Russian oil, which prevents the nation from using western shipping and insurance services unless crude is sold below that threshold. 

Though some estimates show Russia’s oil exports plunging in response to EU sanctions, other data show its crude is still making its way to key markets. Around half of Russian oil is still being backed by western shipping and insurance services despite being sold above the price cap, Bloomberg said. And despite the oil ban, Europe is still importing crude of Russian origin via India, per Reuters.

Russia has also vowed to slash its oil production by half a million barrels a day until June, but an increase in oil shipments will undermine the effect output cuts will have on the international market.

Still, experts say Russia’s economy is at risk as it isolates itself from global markets and shifts away from investment in high tech sectors. Finland’s central bank warned Russia was on the path to a “bleak economic future,” and one think-tank believes Russia could become a failed state by 2033.

Read the original article on Business Insider
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