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Russia’s Crude Shipments Slump Ahead of March Output Cut

Seaborne exports fall to a six-week low with a 500,000 barrel a day production cut due to start in March

An oil tanker docked Kozmino oil terminal in the Russian Far East.

An oil tanker docked Kozmino oil terminal in the Russian Far East.

Russia's oil exports fell to a six-week low, reversing a previous trend and providing a sign of what’s to come as it prepares for a production cut of 500,000 barrels a day next month.

Aggregate flows of Russian crude fell by 562,000 barrels a day, or 16%, in the seven days to Feb. 10, even as exports from its Baltic ports edged higher. Combined shipments from the Arctic and the Pacific were down by half a million barrels on a daily basis, while those from the Black Sea also slumped. The less volatile four-week average fell for the first time since early January. 

Moscow has been keen to portray its production cut, which Deputy Prime Minister Alexander Novak announced Friday, as retaliation for the Group of Seven price cap on its exports. However, it may also reflect the difficulty Russia faces in maintaining crude oil shipments to its four remaining customers — China, India, Turkey and Bulgaria. Falling revenues have prompted the Kremlin to propose changes to the way its crude prices are calculated for tax purposes.

The volume of crude on vessels heading to China and India — plus small flows to Turkey and the quantities on ships that haven’t yet shown a final destination — fell in the four-week period, to an average 3.07 million barrels a day. While that’s down slightly from the period to Feb. 3, it is still the second-highest amount observed since Bloomberg began tracking the shipments at the start of 2022.