Russian seaborne crude exports hit 12-month high as Indian imports surge

Russian seaborne crude exports rose 8% on the month in April to a 12-month high as Indian refiners snapped up record volumes of discounted Russian oil displaced from Europe due to sanctions, according to tanker tracking data.

Russia-origin seaborne crude exports averaged 3.76 million b/d in April, the highest since April 2022 and 22% above average pre-war levels of 3.1 million b/d, according to S&P Global Commodities at Sea data.

India imported almost 2 million b/d of Russian crude in the month, the data shows, a 14% jump on March and a fresh record high for Russian crude flows into the country.

With the change in trade flows since the start of the Ukraine war, more than 90% of Russian crude exports are now finding buyers in Asia , the data shows.

Indian refiners' purchases of medium-sour diesel-rich Urals crude have remained steady in the last few months but they have ramped up buying of other Russian grades such as ESPO Blend, Novy Port, Sokol, Siberian Light, and even some Arctic grades, according to analysts at S&P Global Commodity Insights. Traditionally relying on crude imports from the Middle East, West Africa and the US, Indian refiners imported just 1% of their crude from Russia in 2021.

The surging Russian flows to India come despite narrowing discounts for Moscow's key Urals export grade. The Platts-assessed Urals DAP West Coast India discount to forward Dated Brent narrowed from $15.95/b on March 30 to $13.50/b May 2, the tightest spread since mid-January when the differential assessment was first launched.

But Russian crude flows to India are now reaching saturation point for the local refining slate, according to S&P Global analysts. Russian oil now accounts for almost 40% of Indian crude imports, which is close to the estimated maximum of 40-45% that refiners could technically process given the quality of the crude.

STS transfers

The data also shows a sharp 50% slump in ship-to-ship tanker transfers of Russian crude as ice-class vessels now engage in complete voyages to Asia. Crude exports from the Baltic increased 285,000 b/d month on month in April to 1.69 million b/d, boosted by a 323,000 b/d monthly increase in cargoes bound directly for India, the data shows. Russian crude loaded from Baltic ports en route to India averaged a record 1.25 million b/d.

As a result, 8.6 million barrels of Russian crude were involved in STS activity in April, according to the data, a five-month low. In previous months, STS transfers off Kalamata, Greece, were a major location for transfers of Russian crude but no STS activity was seen there for the first time since November, the data shows.

Moscow's ability to continue expanding crude exports comes despite G7-led curbs on shipping which only kick in if the Urals crude price trades above $60/b. Urals crude loaded at Primorsk hit a 2023 high of $56/b on April 18 but has since fallen to $50/b, according to Platts assessments.

Recent Russian pledges to extend output cuts to the end of the year are no longer expected to curb oil exports in the coming months.

"Russia extended a pledge to maintain 500,000 b/d cuts through end-2023, but we are skeptical any volumes will be voluntarily curtailed absent tighter Western sanctions," analysts at S&P Global Commodity Insights said in a recent note.

Oil products

Russian oil product exports, the target of the West's most recent round of efforts to curb Moscow's oil revenues, fell by 16% on the month in April, according to the tanker tracking data.

Russia-origin seaborne oil product exports averaged 2.58 million b/d in April, from a post-war high of 2.98 million b/d in March as scheduled refinery maintenance slowed product output.

The data shows that Turkey remains the biggest buyer of Russian oil products while increasing flows of middle distillates displaced from European markets head to Africa.

Greece remains a major location for marine transfers of Russian oil products, however, with 221,000 b/d of products involved in STS activity, the data shows. Tankers were also seen swapping Russian fuels offshore near Panama and Tunisia for the first time but no cargoes were seen involved in STS activity cargoes were near the Spanish port of Ceuta on the north African coast.