Russia’s seaborne crude exports fell to their lowest level since September 2021 in the first half of this month as discounts on Russian crude become less attractive to its customers.
In the first two weeks of September, exports stood at 3.03 million bpd, down about 314,000 bpd from August, according to Kpler data cited by S&P Global, which also noted that it was below levels before Russia’s invasion of Ukraine.
The decline came as one of Russia’s biggest customers sharply reduced purchases. Russian crude flows to India fell 40% from August levels in two weeks to 452,000 barrels per day.
Meanwhile, the discount to Russia’s Urals crude compared to Dated Brent in Europe has fallen from $40 a barrel in July to just $20 a barrel. And ESPO Russian crude spot prices offer only a 50-cent discount to ICE Brent crude in the first month, S&P analysts said.
In fact, India is turning to cheaper oil from Saudi Arabia, which last month dethroned Russia as India’s second largest oil supplier.
The decline in India’s demand for Russian oil comes as the European Union’s partial oil embargo on Moscow begins at the end of the year. The Kremlin said countries such as India and China could offset the drop in exports to Europe.
But Russia could soon have a much bigger hole to fill. Its oil supplies to the EU have fallen below a million bpd, according to S&P, and the embargo could leave Russia with an extra 2.2 million bpd to hand over.