Russia has promised to further comply with its production cuts for OPEC+, but factors such as Western energy sanctions have hit Russia's oil exports.
According to Bloomberg's report on Tuesday, the four-week average of Russia's maritime oil exports fell for the third consecutive week to the lowest level since December last year. The export volume of the country's two main oil ports, Primorsk and Ust-Luga, fell by 41% last month and is expected to continue to decline.
Russian maritime crude oil exports
The decline in Russian oil exports may be due to the country's improved compliance with the OPEC+ production target, as well as the recovery of its domestic refining industry (which will reach a six-month high in July). The attack of Ukrainian drones on Russia's Lukoil Pjsc sponsored adr Tuapse refinery may also have caused damage.
Sources said that Russia plans to further reduce production in the coming months to compensate for production exceeding OPEC+ quotas. Kremlin overall follows the guidance of OPEC+, and in a series of production reduction actions in March, Putin supported OPEC+'s efforts to maintain oil prices, but also expressed concern about losing market share to the United States.
So far this year, Russian oil exports have fallen by about 0.03 million barrels per day compared to the average level last year, and have fallen by 0.62 million barrels per day from the peak in April.
Another reason for the decline in Russian oil exports is that the UK recently imposed sanctions on tankers transporting oil from Russia, including some tankers belonging to the country's "shadow fleet". So far, more than 60 tankers transporting Russian crude oil have been sanctioned. These sanctions have prompted some countries like India to refuse to receive Russian oil at their refineries.
Since the outbreak of the Russia-Ukraine conflict in 2022, sanctions against Russian energy have been escalating.
Ukraine recently imposed sanctions on Russian oil supplier Lukoil. The company will transfer approximately 0.09 million barrels per day of crude oil that cannot be shipped to Hungary and Slovakia (because the pipelines transporting oil to these countries need to pass through Ukraine) to other destinations, which may increase its maritime exports.
Russia still plays an important role in the global crude oil market. According to Statista's data, in 2023, Russia's crude oil production accounts for about 12% of global production, making it the world's third-largest crude oil producer.