Russian crude exports slump to two-year low as refineries ramp-up

Russia's seaborne crude oil exports fell to a two-year low in December as the end of seasonal plant maintenance saw increased throughputs at its refineries, which in turn boosted fuel exports, according to preliminary tanker tracking data.

Crude shipments from Russian ports averaged 3.07 million b/d in December, down 464,000 b/d, or 13%, from November levels of 3.54 million b/d, according to S&P Global Commodities at Sea data.

At the same time, Russian fuel and oil product exports surged to an eight-month high of 2.57 million b/d, the data shows.

Despite the steep monthly fall in crude exports, full-year shipments averaged 3.55 million b/d, little changed from a post-war high of 3.6 million b/d in 2023, the data shows.

Russian refinery outages fell significantly in November, dropping to less than one-third of the October peak of around 1 million b/d, as capacity restarted following heavy seasonal turnarounds. With no major Ukrainian drone attacks on Russian refineries in recent months, the recovery in refining capacity absorbed more crude into the domestic system.

In terms of destinations, the biggest fall was in exports to Turkey, which almost halved to 223,000 b/d.

Export flows to India, Russia's biggest oil buyer, fell by 123,000 b/d to a 10-month low of 1.46 million b/d. Full-year exports nevertheless reached a new record high of 1.69 million b/d, beating the 2023 record of 1.64 million b/d.

Exports to China, Russia's second biggest seaborne oil customer, fell by 1% on the month to 1.2 million b/d. Accounting for barrels arriving via ship-to-ship transfers, China's annual seaborne imports of Russian crude averaged 1.2 million b/d in 2024, beating the previous year's average of 1.17 million b/d.

Since 2023, Russian barrels have constituted about 12% of China's total seaborne crude imports, compared to 7.5% in 2021 before Russia's invasion of Ukraine. But this could be set to change after China's Shandong Port Group banned ships sanctioned by the US, in a move that will pose challenges to sourcing non-sanctioned crude for China's independent refineries.

Crude imports to Shandong's ports accounted for 31% of China's seaborne crude imports in 2024, with around a third -- or about 1 million b/d -- transported by sanctioned ships.

Urals discount narrows

The US, the UK and the EU in December widened their sanctions targeting Russia's shadow fleet of oil tankers in a bid to crack down on the widespread circumvention of the G7's so-called 'price cap' on Russian oil.

More than 80% of Russia's seaborne crude exports in November were lifted by tankers not flagged, owned or operated by companies based in the G7, the EU, Australia, Switzerland, and Norway, according to data from Commodities at Sea and Maritime Intelligence Risk Suite.

Despite the efforts to tighten compliance with Western sanctions, discounts for Russia's flagship Urals crude grade to Dated Brent have narrowed to their lowest level since Russia's invasion of Ukraine.

Platts, part of S&P Global Commodity Insights, assessed Urals on a FOB Primorsk basis at an $11.40/b discount to Dated Brent Jan. 2, the narrowest discount recorded, after averaging around $12.50/b in December.

The Russian government announced Nov. 30 the partial lifting of its gasoline export ban by allowing refineries to start exports from Dec. 1. Russian gasoline exports are relatively small, accounting to less than 100,000 b/d including blendstocks.