Russian Oil Exports Rise Despite Reluctant Buyers

• Seaborne crude oil exports from Russia have been higher so far this month compared to February.

• Petro-Logistics sees the first signs that “a bit more oil” is heading to China, as well as to India.

• Some vessels are struggling to find a buyer.

Seaborne crude oil exports from Russia have been higher so far this month compared to February, but a number of cargoes are awaiting destinations, tanker-tracking firm Petro-Logistics told Reuters on Thursday.

So far in March, seaborne crude exports out of Russia rose by 350,000 barrels per day (bpd) compared to February. Crude exports have averaged nearly 3 million bpd, while oil product exports have been over 2 million bpd so far this month, Petro-Logistics says.  

Seaborne exports of some oil products, including fuel oil and vacuum gas oil (VGO), however, have plunged by 40 percent so far in March compared to February, the tanker-tracker notes.

Russian oil was struggling to find spot buyers even before the United States banned imports of Russian energy early last week. Although the U.S. ban will directly hit only a small amount of Russian oil exports, the indirect hit could be much higher because a growing number of traders and buyers will be shunning Russian crude due to “self-sanctioning” and reputational risks.

According to Petro-Logistics chief executive officer Daniel Gerber, who spoke to Reuters:

“We have noticed a number of vessels at anchorage and seemingly awaiting orders, and we have seen a couple of cargoes that turned back from heading transatlantic, and they are also awaiting orders.”

Petro-Logistics sees the first signs that “a bit more oil” is heading to China, as well as to India, which is said to have bought the Urals grade – typically exported to Europe – for the first time since November.

According to analysts and traders, the U.S. ban on imports of Russian oil is likely to worsen Russia’s struggles to sell its cargoes as buyers will avoid Russian crude even more than they have been doing so far, while China and India would not be enough to offset the loss from the European market.

The International Energy Agency (IEA) warned on Wednesday that the market could lose 3 million bpd of Russian oil supply starting next month.