MOSCOW (Reuters) – Oil loadings from Russia’s western ports in April will rise to the highest since 2019, above 2.4 million barrels per day (bpd), despite Moscow’s pledge to cut output, trading and shipping sources said.
Russian crude exports and transit from the ports of Primorsk, Ust-Luga and Novorossiisk in April will rise above 10 million tonnes, up from 9.7 million tonnes in March, which is a day longer.
Russia’s Deputy Prime Minister Alexander Novak said on Feb. 10 that Russia would reduce production by 500,000 bpd in March, then in early April promised to extend cuts until the end of the year.
Saudi Arabia and other OPEC+ oil producers early in April announced additional cuts of around 1.16 million bpd, joining Russia’s initiative to reduce output. It was unclear if Russia’s high exports mean it has lowered its output cuts.
Seasonal maintenance on Russian refineries in April could explain the high crude exports as the state’s domestic market needs less oil, the sources added.
In April, the amount of primary oil refining capacity offline will rise to 3.132 million tonnes from 1.684 million tonnes in March, data from industry sources and Reuters calculations show.
Urals crude exports from Primorsk in April will reach some 4.4 million tonnes, while Ust-Luga will load 3.0 million tonnes of Russia’s Urals and Kazakstan’s KEBCO crude oil grades, the three sources told Reuters on condition of anonymity.
Urals, KEBCO and Siberian Light loadings from the Black Sea port of Novorossiisk will total some 2.7 million tonnes, they added.
Russia’s Urals oil keeps flowing to Asia in April, while softer freight rates help the grade’s sellers to reach far-away costumers, accoding to Reuters souces.
India and China have snapped up the vast majority of Russian oil so far in April at prices above the Western price cap of $60 per barrel, according to traders and Reuters calculations.
Traders expect the demand for the grade in Asia to remain high next month amid growing competition for the Russian barrels, as China will likely boost Urals seaborne imports in May.
“Urals demand remains solid, the prices for Urals’ loadings in May and bound for India are higher compared to April”, a source with a trader said.
(Reporting by Reuters; editing by Barbara Lewis and Jonathan Oatis)
