Russian crude exports will reach a multiyear high of 5.7 million bpd in April, 400 000 bpd higher than average exports in the previous 5 months, according to a Market Alert released by ESAI Energy. Among other things, unusually high exports have implications for market share in Asia. As the past few years’ fluctuations in Russian exports have shown, unusually high exports are accompanied by greater flows of Russian crude into Asia.
The unusual jump in exports has been triggered in part by the unplanned extension of maintenance at Rosneft’s Tuapse refinery. Due to the delayed resumption of refining, 600 000 bpd of distillation capacity will be offline in April, according to ESAI Energy estimates. Lower domestic crude demand will free up more crude for export, having the biggest impact on seaborne Urals volumes.
“Any spike in crude exports will impact the flow of Urals from Russia’s European ports to Asia,” explained ESAI Energy Principal Andrew Reed. “In search of a market, exporters of Russian crude generally ship these excess barrels to Asia. The irony, which will not be lost on the Saudis, is that Russian exports to Asia will strengthen just as Russian producers finally comply with their OPEC+ obligations.”
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