Seaborne

Russia’s flagship maritime oil exports set to slump

Exports of Russia’s flagship crude oil from its Baltic Sea ports are set to fall in February to the lowest level in five months, at a time when Russia would also struggle to increase oil production as much as its OPEC+ quota. permits. .

Russia is expected to ship from its Baltic ports next month 1.31 million barrels per day (bpd) of its flagship Urals grade popular with European refiners, according to loading data compiled by Bloomberg.

This would be the lowest volume of Urals shipments from Russian Baltic Sea ports since September 2021, according to Bloomberg estimates.

The drop in forecast exports from the Urals by sea could be the result of an increase in refineries in Russia and a possible increase in crude oil shipments to Europe via the Druzhba pipeline, analysts told Bloomberg.

Ural-grade prices have strengthened in northwestern Europe in recent months amid good refining margins, JBC Energy analysts told Bloomberg.

With Russian exports from the Urals set to fall next month, Russia has recently suffered setbacks in its bid to pump up its OPEC+ quota.

Russia will likely continue to lag in the coming months, analysts told Bloomberg last week. Russia may be able to increase production by 60,000 bpd each month in the first half of 2022, just over half of the 100,000 bpd monthly production growth it is entitled to, according to a Bloomberg survey. from analysts.

Russian supply will stabilize over the next two months, Francisco Blanch, head of global commodities at Bank of America, told Bloomberg earlier this month, saying triple-digit oil “is in the works” for the second quarter of this year.

Demand is picking up significantly, while OPEC+ supply will begin to stabilize in the next two months, Blanch said, noting that only Saudi Arabia and the United Arab Emirates will be able to produce additional barrels to add. at the market.

By Charles Kennedy for Oilprice.com

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