Russia's Maritime Oil Exports Plummet to Lowest Level Since Early 2025
In light of the adaptation to US sanctions against LUKOIL and Rosneft, Russia's maritime oil exports fell to 291,000 tonnes per day in mid-November, marking the lowest level since early 2025. Simultaneously, freight rates for transporting crude oil from Russia continue to rise, reaching annual peaks on certain routes.
Maritime oil exports from Russia decreased by 12.7% from 10 to 16 November, falling to 291,000 tonnes per day, according to an overview from the Centre for Price Indices (CPI). This represents the lowest value recorded this year.
The most significant decline occurred at the Primorsk port, where loading decreased by 73.2% over the week to 43,000 tonnes per day. A total of three Aframax tankers, each with a deadweight of 100,000 tonnes, departed from Primorsk: one heading to Turkey, another to Egypt, and the third to an undisclosed location. Additionally, no Russian oil shipments were recorded at the Novorossiysk port due to an incident from 14 to 17 November.
The CPI attributes the drop in export volumes to a restructuring of trading processes by certain companies. Analysts have previously noted that such a necessity might arise due to US sanctions against LUKOIL and Rosneft. According to S&P Global Commodities at Sea (CAS), China and India, the two largest buyers of Russian oil, have recently increased their imports of crude from the Middle East and the Atlantic Basin in response to tightening sanctions against Russia.
The increase in risk premiums and the global rise in demand for Suezmax tankers, with a deadweight of 135,000 tonnes, have raised the freight rates for transporting Russian oil from Novorossiysk to Western India by 1.2% over the week, to $8.60 per barrel, as calculated by the CPI. Transportation costs for oil from the Azov-Black Sea ports to Turkey have risen by 2.8% to $5.10 per barrel, while the rate for the Western India route has increased by 3.2% to $8.80 per barrel, according to the CPI. The global Suezmax index reached $63,130 per day by 17 November, which is 1.7 times higher than at the beginning of October, according to S&P Global.
Market participants note a reduction in available free tonnage from Greek shipowners, as reported by the CPI. Greece has long been essentially the only jurisdiction within the EU to own ships transporting Russian oil, says Sergey Tereshkin, CEO of Open Oil Market. Malta was another exception, but the volumes shipped by Greek tankers were significantly higher, he adds.
Some of the US sanctions introduced at the end of October come into effect on 21 November, prompting shipowners to continue increasing risk premiums when transporting Russian oil. The CPI explains that potential issues at unloading ports due to failure to meet delivery timelines could result in substantial financial losses. However, analysts note that the primary factor contributing to rising freight rates will be the global trend of increasing maritime logistics costs driven by seasonal demand.
Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, believes that the cost of transporting Russian oil has peaked. However, the CPI forecasts that the record freight rates for Suezmax vessels could be broken by the end of the year. The process of replacing oil subject to sanctions will create additional demand for tankers, quotes CAS Giovanni Gavarone from Maersk Tankers.
Until the end of 2025, the volumes of maritime oil supplies from Russia will also depend on how importing countries perceive the risks associated with sanctions, believes Sergey Tereshkin. He states that the recent decision by the US Office of Foreign Assets Control to extend the timeline for LUKOIL to wind down its overseas operations is a positive sign that buyers may interpret as a sign of mitigated risks. The CPI believes that the rising freight rates for Russian oil will attract global carriers, including those from Greece, China, and the UAE.
On 19 November, Deputy Prime Minister Alexander Novak stated that US sanctions against Rosneft and LUKOIL have not affected oil production in Russia. In November, oil production in the country is growing slightly faster than in October, and the yearly forecast for production remains at 510 million tonnes. The discount on Russian crude will gradually decrease as the market adapts, said Alexander Novak.
Source: Kommersant
