Mikhail Svetlov/Getty Images
- Russia’s seaborne crude oil exports rose 30% in the week ending January 13, per Bloomberg.
- Russia’s oil revenues rose 4% on-week to $61 million for the week ending January 13.
- The demand was mainly from China and India. The EU has banned most imports of the fuel.
The European Union may have banned most Russian oil imports but the energy giant has still been able to find buyers for its seaborne crude exports — shipments have now surged to their highest level since April 2022, according to Bloomberg’s analysis based on vessel tracking data.
Russia’s week-on-week crude oil exports rose 30% to 3.8 million barrels a day in the week ending January 13, Bloomberg reported Monday.
That’s all thanks to robust demand from Asia, even as European shipments tapered off.
While shipments to Europe made up just about 5% of total crude exports, and no exports destined for Northern Europe, China and India were major buyers of Russian crude.
Of the total 2.82 million barrels a day which were headed to Asia in the week ending January 13, China and India snapped up 35% and 27% of the shipments, respectively. Another 20% of the total Asian shipments showed unknown destinations — but typically end up in China or India, according to Julian Lee, Bloomberg’s oil strategist.
Russia’s energy revenues have been hit by sanctions, but it continues to have buyers
The shipments helped boost Moscow’s oil coffers, as revenues from Russia’s crude oil export duty rose 4% on-week to $61 million in the week ending January 13, according to Bloomberg.
However, energy revenues are still significantly lower than a high of $232 million in the week to April 29 last year, because the Kremlin has started charging a lower tax rate for oil shipments to support exports. Other factors are hammering Moscow’s oil revenues, like a slump in oil prices due to recession fears, and an overall fall in demand which contrasts with robust Russia supply.
Oil prices have also fallen since they reached a 14-year high of nearly $140 barrel in March 2022 after Russia invaded Ukraine. International benchmark Brent crude oil futures are now around $85 a barrel.
Even Russia’s flagship Urals crude — which is priced against the price of Brent oil — has been trading at a large discount to the international grade, particularly since price-sensitive China and India are the few willing buyers left.
But others have called for stricter measures to further hamstring Russia’s oil coffers, and by extension its war efforts in Ukraine.
Russia’s oil revenues have tanked from $1.1 billion a day to $687 million a day, thanks to the EU’s embargo on most Russian oil imports and a $60 a barrel price cap. But more can be done to press the Kremlin into ending its war in Ukraine, the Helsinki-based Centre for Research on Energy and Clean Air, or CREA, said in a January 10 report.
The CREA is recommending stepping up the pressure by further lowering the price cap on Russian crude oil to $25 to $35 a barrel — which would slash Russia’s oil export revenue by a further €100 million, or about $108 million, a day.
“Further cuts to Kremlin’s revenue will therefore materially weaken the country’s ability to continue its assault and help bring the war to an end,” CREA said in its report.