Russia's average crude oil export volume fell for four consecutive weeks, and the four-week average crude oil shipment volume for export statistics reached its lowest level since mid-February. Shortly after this data, Saudi Arabia and the Russian-led OPEC+ crude oil producer group met on Sunday. Russia has reached a promise to cut production, saying it will make up for the overproduction of the April production target, and blamed it on “technical details” of the drastic reduction in production. The latest statistics show that over the past month, crude oil export shipments under Russia's daily benchmark have been reduced by about 400,000 barrels.

Therefore, the decline in crude oil exports over the past month may indicate that Russia is fulfilling the country's crude oil production reduction promise. Although production and exports are not 100% closely related, in terms of the international crude oil benchmark, the Brent crude oil price trend, the signal that Russia has fulfilled its production reduction promise will drive prices upward in the short term.

According to previous statistics, Russia's daily crude oil exports in April were about 120,000 barrels higher than the production reduction target set for that month, but the daily export volume in May was about 170,000 barrels lower than another target with less restrictions. Notably, starting this month, Russia no longer has export targets for the month, as Russia and OPEC+ member states agreed to replace a more complex combination of production and export caps with simplified production limits preferred by OPEC.

Although Russia's crude oil exports remained relatively stable under the weekly benchmark, Russia's total export value rose slightly in the 7 days up to June 2 due to a slight increase in international crude oil prices.

Seaborne crude oil - Russian seaborne crude oil export traffic volume (2022 - 2024)

Judging from crude oil export data, the Kremlin continues to test full restrictions on crude oil transportation by many countries, led by the US and the European Union.

Meanwhile, Russia is developing closer partnerships with Middle Eastern countries, and recently added Oman to its growing list of partners in the region. Russia is already co-chairing a key committee of the OPEC+ Oil Producers Group with Saudi Arabia, and most of Russian oil trade was transferred to the UAE after the full escalation of the Russian-Ukrainian conflict in 2022 was turned off by European countries.

Crude oil shipments - Russian crude oil shipments (million barrels/day)

As naval exercises in the Gulf, which are conducive to such activities, hinder ship-to-ship transfers from Greece, are also being carried out elsewhere. Near the coastline of the Middle Eastern country Oman, several cargoes were transferred from one ship to another, recently near Morocco.

Also, in recent weeks, two Russian tankers sanctioned by Western countries have loaded crude oil in Novorossiysk (Novorossiysk). The “Bratsk” (Bratsk) loaded about 1 million barrels of Russia's flagship crude oil, Ural crude oil, on May 23, and is currently crossing the Red Sea to Singapore. The first sanctioned loading vessel, SCF Primorye, disappeared for about two weeks during AIS tracking east of Singapore, a popular location for hidden ship-to-ship oil transfers.

If these goods end up being shipped to major refineries, it could pave the way for the restoration of other sanctioned tankers owned by Russian state-owned energy carrier Sovcomflot PJSC. Of the company's 21 ships, at least 10 are listed by the US Treasury as violating sanctions against the upper limit of Russian crude oil prices led by the Group of Seven (G7), but the company has renamed these vessels and changed their flags.

Overview of Russian crude oil shipments

Ship tracking data and port agency reports show that in the week ending June 2, a total of 29 tankers carried up to 22.53 million barrels of Russian crude oil. This is basically the same as the previous week's 2.54 million barrels, but the overall number of ships declined slightly compared to the previous period.

Tankers are loading crude oil at Russian terminals — in the week ending June 2, 29 tankers were carrying Russian crude oil

For the week ending June 2, Russia's seaborne crude oil flow has basically stabilized at around 3.22 million barrels per day. The four-week average, which was less volatile, fell by about 115,000 b/d to 3.27 million b/d, for four consecutive weeks of decline.

Freight volumes from the Black Sea port of Novorossiysk and the Pacific ports of Kozmino and de Kastri have been drastically reduced, partly offset by cargo volume from the Murmansk Arctic terminal.

Russian crude oil shipments so far this year are about 5,000 b/d higher than the 2023 average.

Russian Seaborne Crude Oil - Russia's Average Four-Week Crude Oil Export Shipment Volume (By Destination) (2021-2024)

Russia's crude oil exports to places of greatest demand have declined markedly

According to the latest statistics, the amount of crude oil shipped from Russia to customers in Asia that demand crude oil (including crude oil not showing the final destination) fell to an 11-week low of 2.93 million b/d within the four-cycle period ending June 2, compared to 2.99 million b/d in the four weeks ending May 26.

Russia's Asian Customers - Four-week Moving Average of Crude Oil Transportation at All Russian Ports (2021-2024)

Statistics show that every day about 1.09 million barrels of Russian crude oil are loaded onto oil tankers bound for China. The Asian country's maritime imports benefit from about 800,000 barrels of crude oil delivered directly from Russia through pipelines or through Kazakhstan every day.

Ships sending signals to India, the most in-demand destination, have an average daily export volume of about 1.53 million barrels of Russian crude oil.

Russia's export figures to China and India are likely to rise as the ports of discharge for ships that currently have no indication of their final destination may gradually become clear.

The equivalent of about 180,000 barrels of oil per day comes from ships in Egypt's Port Said or the Suez Canal. These voyages usually end at Indian or Chinese ports and appear as “unknown Asia” until the final destination becomes apparent.

In the four weeks up to June 2, the amount of “other unknown” oil was about 130,000 barrels per day, which means the amount of oil on tankers with no clear destination. Most come from western Russian ports and transit through the Suez Canal, but there are also a few that may end up in Turkey. Other vessels may move from one ship to another. Currently, most such transfers occur in the Mediterranean region, or recently near regions such as Morocco.

Crude oil shipped to Asia - Russia's crude oil shipments to Asian buyers (million barrels/day)

It is worth noting that Russia has completely stopped exporting crude oil to any European country. At the end of last year, crude oil exports to Bulgaria were also stopped by the European and US governments. At the beginning of 2023, as the Polish and German governments stopped purchasing Russian crude oil, Moscow's pipeline exports to Poland and Germany were also reduced by up to 500,000 b/d every day.

Turkey is currently the only terminal market for short-distance crude oil transportation from western Russian ports. In the 28 days up to June 2, crude oil export traffic declined to only about 340,000 barrels per day.

The volume of crude oil delivered by Russia to Europe and Turkey - average crude oil shipments in four weeks in Russia (2022 - 2024)

The value of Russian crude oil exports rebounded slightly

In the seven days ending June 2, the total value of Russian crude oil exports rose slightly from about US$1.56 billion as of May 26 to US$1.57 billion, thanks to a slight increase in the international crude oil benchmark, Brent crude oil during this period. In contrast, the four-week average revenue from Russian crude oil exports fell by about $72 million to $1.59 billion a week, the lowest level since February.

In the first four weeks after the G7 price limit for Russian crude oil exports came into effect in early December 2022, the value of Russian seaborne crude oil export flows fell to a historic low of US$930 million per week, but soon fully recovered with Asian demand boosted.

Russian crude oil export value - total revenue from Russian seaborne crude oil exports (2022 - 2024)