The Steady Erosion of Russian Oil Exports Continues

Another week, another sign that Russia is struggling to get its oil to market.

The nation’s shipments to buyers have declined for five consecutive weeks, taking them down by 480,000 barrels a day, or 13%, since mid-June. That's based on a rolling four-week average that helps to provide a better picture of the trend than the observation of flows from one week to the next.

Traders and investors are monitoring Russia’s crude flows closely, since what happens to them is central to the global oil market and how tight it gets. The shipments also go a long way to determining how much money flows into the Kremlin’s coffers to fund the war in Ukraine.

In the aftermath of the invasion, large numbers of European companies stepped back from dealing with Russia, with Asia — specifically China and India — filling the void that was created.

But there are tentative signs the two nations’ appetite is decreasing.

Shipments to China and India are down by somewhere between 15% and almost 40% from their post-invasion peak, according to the ship tracking data monitored by Bloomberg for this story. The final scale of the drop will depend on where almost 4 million barrels of crude on tankers that are yet to show final destinations is discharged. Much may eventually go to Asia.

There’s still a long way to go before a drop in shipments hits the Kremlin's war chest hard enough to give President Vladimir Putin second thoughts about his invasion of Ukraine. Rising crude prices have boosted Russia’s export duty rates this month, offsetting some of the reduction in flows. While shipments in the week to July 22 fell to their lowest since the week ending March 25, export revenues were the lowest in only four weeks.