Russian crude exports on G7 tankers surge by over 50% in April, hitting 13-month high

Russia hiked crude exports on tankers using G7 maritime services by over 50% in April, aided by Greek operators taking advantage of legal trading opportunities with Urals firmly below the price cap.

S&P Global Commodities at Sea and Maritime Intelligence Risk Suite data showed that 1.27 million b/d of Russian seaborne exports were lifted in April by ships flagged, owned or operated by companies based in the G7 or their allies or insured by Western protection and indemnity clubs, a 54% jump from 820,100 b/d in March and the highest since March 2024.

Those tankers were responsible for 35.9% of the OPEC+ member's total exports in April, also a 13-month high and up from 23.2% in March.

G7-linked tankers could transport Russian crude when the barrels were sold for no more than $60/b, and Russia's flagship export grade, Urals, has traded below the threshold amid general oil market weakness over recent months.

The monthly average price for free-on-board Primorsk Urals was $52.858/b last month, down from $57.421/b in March and the weakest monthly reading since June 2023, according to Platts assessments.

The CAS and MIRS data reveal that in April, there were more Urals shipments on G7-linked tankers, at 26.9 million barrels, than non-G7 tankers, at 23.5 million barrels, the first time this occurred since July 2023.

"Russian crude is now being lifted under the terms of G7 price cap ... This is making mainstream Aframaxes scarce globally," shipbroker BRS said in a recent note.

Analysts have suggested tanker operators in Greece, Europe's top shipowning nation, are willing to trade in Russia within the price cap regime.

Greek operators loaded 17.5 million barrels of Russian crude onto their tankers in April, a high not seen since October 2023, and up from 17.2 million barrels in March, according to CAS and MIRS.

Russian crude became more competitive against other origins due to low prices and support from mainstream tankers, with Platts data showing the discount of Urals on a DAP West Coast India basis to Dated Brent pegged to $2.40/b since April 30, the narrowest since the assessment was launched in January 2023.

Non-G7 tonnage

Meanwhile, companies in the Seychelles, the UAE, China and Hong Kong have retained significant shares in Russia's crude export markets, mostly operating tankers without access to G7 maritime services.

CAS data shows 13% of Russia's crude exports in April were loaded by sanctioned tankers, part of the non-G7 fleet, with Chinese firms showing the strongest willingness in receiving such ships.

Western authorities have not targeted ships transporting non-price-capped Russian oil with sanctions since late February, with US President Donald Trump pushing for a ceasefire between Russia and Ukraine.

But Washington has reportedly stopped mediating efforts amid limited progress in peace talks, and recent legislative developments and comments from the Trump administration suggest the US may be inching toward new sanctions to motivate the Kremlin to strike a deal.

Separately, the European Commission plans to unveil new regulations to clamp down ships transporting Russian oil with sketchy maintenance and insurance coverage next month as part of its efforts to undermine Moscow's war chest and protect marine environments.

Industry participants often refer to such ships as the shadow fleet, amassed by Russia in recent years to bypass Western sanctions and accounting for a predominant proportion of non-G7 shipments.

EU authorities will explore deploying an EU Common Security and Defence Policy mission to monitor maritime activities and potentially board suspicious ships in the high seas or in the exclusive economic zones of EU member states, according to the Commission.

"The message to Russia is clear ... 'Your shadow fleet will be stopped'," said Dan Jørgensen, European Commissioner for Energy.