Russia has practically lost the European market and is increasingly forced to hide its final suppliers in order to direct its flows to Asia. Only Bulgaria remains among Russia's European customers, the prospects for deliveries to which, due to joining the Russian oil price ceiling mechanism, remain vague. However, even with the loss of the European market and the imposition of Western sanctions on December 5, Russia even managed to slightly increase its export earnings to alternative markets. Bloomberg writes about this, which analyzes oil flows from Russia on a weekly basis.
Asian countries now account for about 89% of Russian oil exports (about 3 million barrels per day), most of this volume is accounted for by only two countries – China and India. Also significantly increased the proportion of tankers (up to 890,000 barrels per day), which hide their final destination, but as they approach the Suez Canal, most of them change their destination to Indian ports, the agency notes. At the same time, it remains unclear whether the tankers are shipping with already sold oil, or whether the oil owners are trying to find a buyer directly at sea — in the latter case, this may create additional risks for the seller.
The net volume of oil supplies from Russia to Turkey, China, India reached 2.73 million barrels per day – more than four times higher than before the start of the war in Ukraine. At the same time, deliveries to Turkey have been declining for the fifth week in a row – compared with the beginning of November, the volume of exports to Turkey has fallen by half, but is still twice as high as the volumes that Russia supplied before the invasion of Ukraine. The agency notes that Turkey is one of the few markets that Russia can count on in the near future. At the same time, Ankara is already under pressure for significantly increasing economic ties with Moscow and has been repeatedly criticized and pressured by Brussels and Washington.
Total supplies in the first week of Western sanctions jumped by 468,000 bpd to 3.45 million bpd. The growth in volumes also leads to an increase in Moscow's income: according to the agency, in the week from December 2 to December 9, income from oil supplies increased by $21 million and amounted to $143 million. An increase in revenues was recorded for the first time in five weeks of observations. Revenues are formed on the basis of the export duty, which is set by the Ministry of Finance. In December it is $5.91 per barrel. The problem is that this duty rate was calculated with the average price of Russian Urals oil at $71.1 per barrel, although at the end of November the same grade of oil shipped from the Baltic ports traded at $53 per barrel, so in January we should expect a decrease income while maintaining export volumes, the agency notes.
It will be problematic to maintain the previous volumes of Russian supplies due to the EU oil embargo and the mechanism of maximum prices for Russian oil, which prohibits the purchase of fuel from Moscow at prices above $60 per barrel. The Russian side is preparing its response to these sanctions and is threatening to ban oil supplies to those countries that will join the mechanism.
In this context, the example of Bulgaria is interesting, which formally joined the mechanism, but, as an exception, continues to receive tankers with Russian oil, and even increased supplies in November. It is also unclear how Russia will comply with its contractual obligations to the Czech Republic, Slovakia and Hungary, which voted for sanctions against Moscow, but continue to receive oil through the Druzhba pipeline.