Around the world, there are growing signs that the smooth flow of Russian oil is getting thick.
Even after the world’s main oil forecasting agency said output could fall by 30%, the OPEC+ producer’s exports have so far been resilient as sanctions, along with oil price caps Russian, intended to maintain the flow. However, loads are now starting to take longer to find homes.
In addition to having implications for Moscow (revenues from oil industry taxes accounted for more than two-thirds of energy tax revenues in February), the development may alarm US officials, who during have long argued that Russian oil must flow freely to avoid a surge. in fuel prices.
Ships full of refined fuels are floating off the coasts of Europe, Africa and Latin America, and can raise wait rates. Some ships carrying the OPEC+ producer’s crude bounce between ports without unloading, while others unload and hide in unusual locations.
Everything points to a logistics network struggling to keep up with the pace of service to a country that exports more than 7 million barrels a day of crude oil and products. Much of this trade has moved from Europe to new and lesser-known customers, often thousands of miles away.
“There has already been a mismatch in what comes out of Russian ports and what is imported by Russian oil buyers,” said Giovanni Staunovo, commodities analyst at UBS Group AG. “This translates into higher volumes of oil in the water, and given the limited number of tankers available to carry oil, if those vessels are not unloaded, it will translate into lower exports and production at some point.”
Despite announcing a 500,000 bpd production cut for this month, Russia’s seaborne crude exports have held steady so far this month, weighing on prices in recent weeks .
The question is whether that could come undone if deliveries drag.
About 1.2 billion barrels of crude were in the water last week, the highest for this time of year in data going back to 2016, data from Vortexa Ltd. showed.
Two tankers carrying Russia’s flagship Urals crude to the mouth of the Persian Gulf have been held up since they arrived months ago.
At least four tankers carrying the country’s ESPO crude have been waiting for weeks, some visiting one Chinese port after another, while some 4.4 million barrels of Russia’s diesel fuel remained at sea in early March in its largest accumulation in at least seven years. .
“Willing buyers in Asia, namely India and, to a lesser extent, China, have bought crude cargoes at a discount, but rising volumes in the water suggest that the proportion of Russian oil in the your import mix may be too big for comfort.” the International Energy Agency said in its monthly report this week.
With Asia still hoarding a large amount of Russian supplies, the country nevertheless has to turn to increasingly unusual places to store its crude.
A ship loaded with Russian crude has been idling off the coast of Ghana for almost three weeks and another shipment was sent to storage tanks in southeastern Turkey late last month, the first to be sent to the terminal from Dortyol since at least 2018, when Bloomberg began tracking. the flows
There is also a growing build-up of refined oil, with millions of barrels of diesel-type cargo temporarily stored.
One such vessel, the SCF Yenisei carrying Russian diesel-type fuel, unloaded a cargo after sitting off the coast of Ghana for more than 10 days.
Another, the Adamas I, which loaded Russian fuel in late January, has been floating in Sudan for more than 20 days, according to Vortexa Ltd. and tanker tracking data compiled by Bloomberg.
“While crude cargoes are finding new homes in China and India, the products are facing increasing difficulties in placing them,” said Tamas Varga, analyst at brokerage PVM.
–With the assistance of Julian Lee, Jack Wittels and Prejula Prem.
Photo Credit – iStock.com/Serhii Ivashchuk
