Russian oil exports fall to six-month low, mainly due to weaker demand from India

Crude oil exports from Russian ports fell by around a tenth in May compared with the previous month. The decline was driven mainly by weaker demand from India, which has become the largest buyer over the past two years. Increased activity at Russian refineries also played a role, although exports of most processed oil products were also at a six-month low.

Seaborne crude oil exports from Russia averaged 3,52 million barrels per day (bpd) in May. According to data from S&P Global Commodities at Sea, this represents a month-on-month decline of around 10%, from 3,91 million bpd. The drop was mainly due to lower exports from terminals in the Baltic and Black seas. According to S&P Global, the decline in crude oil exports was also due to a partial recovery in activity at Russian refineries. In recent months, they have faced attacks by Ukraine, whose drones are increasingly penetrating Russian territory.

India recorded the largest fall in oil deliveries, with its imports of Russian crude dropping by around a quarter in May to 1,61 million bpd. In April, India had taken its highest volume of crude oil since becoming the primary buyer in 2022. April’s increase was likely due to the resolution of disputes over the currency used to pay for the oil.

The reason is likely to be the high price sensitivity of Indian refineries, as is also the case in India for other commodities. According to S&P Global, the price differential between Urals and Brent narrowed to just 3,25 dollars per barrel during May. In January last year, Russian oil deliveries to India were around 19 dollars below the price of North Sea Brent.

Oil product exports rise only slightly

While crude oil exports plunged in May, the situation was different for processed oil products. Seaborne exports of diesel, fuel oil and other hydrocarbons from Russia averaged 2,13 million bpd in May. This represents a 3% increase compared with April, but remains around 500 thousand bpd below January levels. Since the start of the year, Ukraine has stepped up attacks on Russian refineries, also leading to a decline in total exports.

According to estimates by S&P Commodity Insights, four Russian refineries are currently partially or completely offline. In March, attacks disrupted or suspended operations at seven refineries with a total capacity of more than 1 million barrels per day. The slight increase in oil product exports was also helped by the suspension of Russia’s ban on gasoline exports.