Russian crude exports hold up despite sanctions

Russian seaborne oil exports remained resilient in February, as the country found new buyers even after the full force of Western sanctions was brought to bear.

Oil market analysts are closely watching Russian export data for signs of disruptions after the European Union and most of the Group of Seven nations banned most maritime imports of crude and fuel in condemnation of his invasion of the Ukraine.

With the help of aghost fleetFor tankers, Russian producers have turned to buyers in the Gulf, Latin America and Asia, vessel tracking data shows.

The EU banned maritime imports of fuel in early February, two months after imposing sanctions on crude shipments. The sanctions come on top of price ceilings for Russian shipments that other countries must adhere to if they want access to Western services like shipping and insurance.

Despite that combination of sanctions, Russian producers exported an average of 7.32 million barrels a day of crude and derivative products, data from research firm Kpler shows. That figure is in line with volumes shipped in December and just 9% below January’s all-time high.

The monthly decline in Russia’s sea flows is mainly due to unusually high exports in January, which were partly related to weather disruptions, crude analyst at Kpler, Victor Katona.

Despite that resistance, Russia’s oil exports face further strain as India, a major buyer of its crude, sees increasing pressure from bankers to prove cargoes meet the oil price ceiling. US$60 per barrel. Tighter control may influence India’s purchases of Russian barrels.

Exports next month could also be affected by the Kremlin’s decision to cut oil production by 500,000 barrels a day in retaliation for Western bans.

So far, it is not clear whether Russian producers will prefer to reduce their crude exports or domestic processing as a result of the restriction. Preliminary plans from March indicate that oil companies intend to maintain a high level of production at the refineries to take advantage of the huge tax benefits that will decrease from April.