Bloomberg: Russia’s crude shipments to Asia tumble to post-invasion low

Russia’s crude shipments tumbled in the week to August 12, dropping to their lowest since March.

The volume sent to key Asian buyers, who have stepped in to take barrels shunned by Europe, fell to its smallest since Russian troops invaded Ukraine in February, according to Bloomberg. 

Even if all the crude on ships showing no final destination ends up in Asia, the flow would still be the smallest since March. While a single week’s figures are not enough to signal the start of a trend, lower flows to China and India, Russia’s two largest export markets, will cause concern in the Kremlin.

Shipments to Asia have been drifting lower from a plateau of about 2 million barrels a day sustained from mid-April to mid-June.

There is no suggestion yet that India is turning its back on the Russian barrels that it has been so keen to buy at steep discounts after they were forced out of traditional European markets.

India’s oil purchasing decisions will continue to “be guided by our energy security requirements,” Ministry of External Affairs spokesman Arindam Bagchi told reporters on Friday.

Russia is also continuing its efforts to develop new markets for its crude. A third tanker is heading to cash-strapped Sri Lanka and two vessels have arrived at El Hamra on Egypt’s Mediterranean coast since Russian Foreign Minister Sergei Lavrov visited the country last month.

Using a four-week moving average to smooth out some of the variability in the weekly figures, Russia’s seaborne crude shipments have stabilized at a level about 500,000 barrels a day below the peak they reached after Moscow’s troops invaded Ukraine, and remain little changed from where they were before the attack.

On this basis, seaborne exports edged lower in the week to August 12, slipping to 3.24 million barrels a day from 3.32 million the previous week, according to vessel-tracking data monitored by Bloomberg.

Based on current destinations, the average flow of Russian crude to Asia fell below 1.75 million barrels a day, down from more than 2.1 million barrels a day in April and May.

Shipments to European buyers including those in northern Europe, the Mediterranean and the Black Sea region were also lower at 1.32 million barrels a day, down from more than 1.85 million a day before the invasion.

Inflows to the Kremlin's war chest from crude export duty remain higher than they were before the war, with four-week average income still running some $30 million above levels seen in January and February.