Russian seaborne exports of crude and oil products were little changed on the month in October after an increase in crude flows despite incoming EU sanctions were offset by a fall in product exports from Russian ports, according to tanker tracking data.
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Seaborne exports of Russian crude rose to 3.09 million b/d in October, according to data from S&P Global Commodities at Sea, up 3% on the month and just below the pre-war average of 3.1 million b/d in January and February.
China and India remain the main destination for Russian crudes in the wake of the Ukraine war, accounting for 58% of all seaborne Russian crude exports in October.
China remained the primary destination for Russian barrels in October despite shipments falling to average 904,000 b/d from 918,000 b/d in September. Shipments to India rose to a record high of 883,000 b/d in October as its refiners continue to snap up discounted barrels of Russia's Urals and ESPO crude streams.
Discounts for Russia's ESPO crude vs Dubai blend have narrowed since hitting a record high above $30/b in June but remain above post-war levels of around $2/b. In October, ESPO discounts vs Dubai averaged $6.7/b, down from $12.9/b in September, according to data from S&P Global Commodity Insights.
Turkey, now Russia's third biggest crude buyer as local refiners switch to cheap Russian crude, saw imports dip 12% on the month to 345,000 b/d. Before Russia's invasion of Ukraine, Turkey's five refineries were importing around 130,000 b/d of Russian crude.
The biggest volume rises on the month were in Europe despite the trade bloc continuing to diversity its crude sources ahead of the EU's Dec. 5 ban on Russian oil.
The data shows that Russian crude shipments to the Netherlands, home to Europe's biggest refining hub, rose 30% on the month to 229,000 b/d but remained at less than half of pre-war levels of around 520,000 b/d.
Russian crude shipments to Italy, where Russia's Lukoil owns the ISAB refinery, also rose 5% to 341,000 b/d, CAS shows.
Fully owned by Russia's Lukoil since 2013, the 320,000 b/d ISAB refining complex in Sicily is Italy's biggest refinery and makes up a fifth of the country's refining capacity. In recent months, ISAB claimed it has been forced to process Russian crude after its banks revoked credit lines used by the refinery to purchase oil from alternative suppliers. The Italian government has since reassured the Lukoil-owned refiner over bank guarantees needed to buy non-Russian crudes and continue operating after EU sanctions kick in.
Italian imports of Russian crude peaked at 472,000 b/d in May, according to CAS, up from 143,000 b/d before the war.
Overall shipments of seaborne Russian crude to the EU rose to 796,000 b/d, the data shows, up 7% from a record low of 745,000 b/d in September.
S&P Global estimates that some 2.5 million b/d of Russian crude and products to Europe will ultimately need to find new buyers when the EU's full oil sanctions on Moscow take effect Feb. 5, 2023.
Singapore product highs
While Russian crude exports rose in the month, the data also showed that its oil product flows continue to shrink from pre-war levels.
Russian product exports fell 4.2% on the month to 2.08 million b/d in October, down from 2.8 million b/d before the war.
The biggest fall was in Russian products headed to Belgium -- home to the Antwerp refining hub -- where flows more than halved on the month to 76,155 b/d.
Flows of Russian fuel oil and products to Greece, a major transshipment hub via ship-to-ship transfers, fell by 90,118 b/d on the month to 274,000 b/d, down from a record 492,000 b/d in August but still well above pre-war levels.
More Russian fuel oil is also headed to Singapore, another transshipment hub, with product flows jumping to a multi-year high of 153,000 b/d.
Turkey remains the top destination for Russian gasoil/diesel with total imports of Russian products above 180,000 b/d for the second consecutive month.
In France, where widespread refining strikes have forced oil companies to meet fuel demand with diesel imports, Russian product shipments almost doubled to 99,700 b/d, the data showed, but remain below pre-war levels of 190,000 b/d.