Russia’s oil exports jump as Middle East war sends prices soaring

Russia’s overseas crude shipments rose to 3.54 million barrels a day in the four weeks through Sept. 13, the biggest weekly increase since mid-May, according to tanker-movement data compiled by Bloomberg.

The increase came as drone strikes shut down Saudi Arabia’s East-West pipeline, sending Brent crude to its highest level since May and lifting prices for Russian grades. Higher prices are increasing the value of Moscow’s exports as the Kremlin benefits from disruption in the Middle East.

Russia’s crude exports are also helping refiners in China and India replace supplies affected by the conflict. Iran-backed Houthi attacks have blocked Saudi flows through the southern Red Sea, while a US blockade of Iran-linked ships has halted about 1.5 million barrels a day that previously moved to China.

Moscow has increased shipments from the Baltic port of Ust-Luga while diverting Kazakh cargoes to the Black Sea port of Novorossiysk. That shift allowed Russian crude flows from Ust-Luga to rise by about one-third, or 160,000 barrels a day, in September compared with August.

In the week through Sept. 13, 38 tankers loaded 27.06 million barrels of Russian crude, up from 23.88 million barrels on 33 ships the previous week. Loading at Novorossiysk accelerated after operations resumed in late August following Ukrainian drone strikes on the port.

Higher international prices pushed the gross value of Russia’s exports to $2.42 billion in the latest week, the highest weekly level since May 24. On a four-week average, export value reached $1.9 billion a week, up $180 million from the previous period and the highest since late June.

India-bound Russian crude earned the most since early May last week, according to Argus Media. Prices paid by Chinese refiners also rose, with Pacific benchmark ESPO offered at more than $20 a barrel above Brent futures on a delivered basis.

Despite the export increase, Russian production fell to 8.72 million barrels a day in August, its ninth consecutive monthly decline. That was more than 1 million barrels below the country’s permitted level under its OPEC+ agreement.

China and India remained Russia’s largest buyers. Shipments to Asian customers, including cargoes without a final destination, averaged 3.41 million barrels a day in the four weeks through Sept. 13, up from 3.35 million the previous week. 

Flows to Turkey fell to about 50,000 barrels a day, while shipments to Egypt rose to roughly 80,000 barrels a day.