According to Bloomberg reports, Russia’s seaborne crude oil exports to Asia are falling in a sign that the country’s energy supply is dwindling.
As most countries moved to sanction Russian energy over its war with Ukraine, Asia instead chose to buy discounted Russian oil, where India and China now account for about 50% of the country’s sea-based oil exports.
Russian crude is offered on the spot market at much cheaper prices than other grades due to sanctions and boycotts, but energy prices have skyrocketed this year, boosting sales for the country. According to a report by Bloomberg Economics, Russian oil and gas sales are expected to grow to $285 billion in 2022, a 20% increase from the country’s 2021 revenue.
However, with the country reaping huge gains, Russian seaborne crude oil exports are down more than 15% on weekly and four-week averages from the highs in May, according to Bloomberg. This month, Russia’s oil export revenues rose 11% to $20 billion.
On average, Russia’s crude oil shipments reached 3.46 million barrels per day in the four weeks ended July 1, down from a peak of 3.75 million barrels per day reached in the four weeks ended April 29.
Shipments to Asian countries other than China and India have essentially dried up, the outlet reported, with just the odd cargo going to Japan and South Korea, reflecting a broad drop in demand. The region accounts for about 52% of Russia’s total seaborne exports, down from a peak of 63% in the four weeks to mid-April.
Russia has already lost much of the European market for its seaborne crude after Brussels announced last month that it would cut imports of Russian oil by 90% by the end of 2022 at the end of next year.
The Organization of the Petroleum Exporting Countries (OPEC) has even considered excluding Russia from an oil production deal after the country missed its production target. An OPEC official told the Wall Street Journal that there was little point in Russia having to stick to quotas it couldn’t meet.
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