Russian Crude Exports Surge as Ukrainian Strikes Hit Refining

(KYIV, UKRAINE) – Russia is struggling to manage its crude oil exports as Ukrainian strikes on its refining facilities force more unprocessed oil onto the global market, according to data compiled by Bloomberg.

The volume of Russian oil loaded onto tankers at sea has returned to the highest levels seen at the start of this year. Tanker tracking data collected by Bloomberg shows that in the four week period to 12 July, seaborne shipments of Russian crude averaged 4.21 million barrels per day. This is just 10,000 barrels per day below the highest figure recorded since Russia launched its full scale invasion of Ukraine.

During that earlier peak, however, around 600,000 barrels per day were being sent via pipeline to refineries in Europe. That route is no longer available on the same scale.

The rapid increase in Russian crude exports now appears to be exceeding buyer orders. As a result, significant volumes of oil are simply sitting at sea. Ukrainian attacks are thought to be forcing Russia to redirect for export crude oil that cannot be processed domestically. This pushes export supply higher, even as production itself falls.

According to data from the Organisation of the Petroleum Exporting Countries, Russia pumped 8.93 million barrels of oil per day in June. That is roughly 830,000 barrels per day below the country’s target under an agreement with the wider producer group.

At the same time, Russian crude cargoes are taking longer to unload than in the past. Five tankers full of Urals grade crude are anchored off the Mediterranean coast of Egypt. Another five have stopped at the Riau archipelago, east of Singapore.

Cargoes of Sokol and Sakhalin Blend grades from Russia’s Far East can wait for weeks to be transferred from shuttle tankers onto ocean going vessels. Some ships carrying the flagship ESPO crude also idle for weeks near the main Pacific port of Kozmino after loading.

Bloomberg estimates that these delays have pushed the total volume of Russian oil at sea to around 135 million barrels.

The difficulties follow a broader trend of pressure on Russia’s refining capacity. Ukrainian drone attacks have already driven Russian oil refining to its lowest level since 2005.