Russian crude is piling up at sea as India’s refiners step back from purchases, leaving Moscow with millions of barrels on tankers and fewer clear outlets for its oil exports.
Russia shipped an average of 3.18 million barrels per day of crude in the four weeks to January 25, according to vessel-tracking data compiled by Bloomberg. That volume was little changed from the prior week but down by about 680,000 bpd from the pre-Christmas peak and the lowest level since August. The bigger issue is not how much Russia is shipping, but where those barrels are ending up.
Deliveries of Russian crude into Indian ports fell to about 1.2 million bpd in December, the lowest level in more than three years. Early January data show imports averaging closer to 1.12 million bpd. The pullback coincided with the European Union’s January 21 ban on imports of refined products made from Russian crude, which has complicated trade flows and refinery economics for Indian buyers.
As a result, Russian oil is piling up at sea. About 140 million barrels of Russian crude oil are currently being held on seaborne vessels, Bloomberg estimates show, which is a roughly 60-million-barrel increase since late August. Some tankers have been idling off India’s west coast and near Oman. Others have made their way closer to China or diverted to interim destinations such as Port Said or the Suez Canal—many without declaring final discharge points.
Some barrels are being offloaded into storage tanks in Indonesia, including sites at Karimun, Balikpapan, and Tanjung Intan, according to tracking data. Even so, only a handful of cargoes have actually discharged, underscoring how limited the available outlets have become.
Despite the logistical bottlenecks, Russia’s export revenues have not collapsed. Bloomberg calculations show the gross value of Moscow’s seaborne crude exports edging up to about $920 million per week in the four weeks to January 25, rising 2% from the prior period. Urals crude prices from the Baltic rose to an average of $38.44 a barrel, while Black Sea cargoes rose $0.70 per barrel to average $35.98. Delivered prices into India rose to roughly $56.27 a barrel, the highest in four weeks.
The risk for Russia is that tougher enforcement against the shadow fleet and buyer caution could turn floating storage from a buffer into a bottleneck. With India stepping back and China absorbing barrels more selectively, Moscow is exporting oil faster than it can reliably sell it.
By Julianne Geiger for Oilprice.com
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