Seaborne exports of Russian oil and petroleum products from the Black Sea between the two embargoes. Main trends: Crude oil

The Monitoring Group of BlackSeaNews
and the Black Sea Institute of Strategic Studies

The Monitoring Group of the Black Sea Institute of Strategic Studies and BlackSeaNews, based on its own monitoring results, reports on the main trends in seaborne export of Russia’s oil and petroleum products from the Black Sea between the two embargoes (the first embargo – on Russian seaborne crude oil exports to EU countries – has been effective since 5 December 2022; the second one – on Russian petroleum products – will come into effect on 5 February 2023).

Summary

According to preliminary estimates, in January 2023, Russia's seaborne crude oil exports from the Black Sea will increase significantly. This growth will be from 15 to 35%, and the volume of exports will reach 3.4-4.2 million tons compared with 2.9 million tons in December 2022 - depending on how many tankers with Russian crude oil will pass through the Turkish straits in the last days of January 2023.

This exceeds the 14.4% increase in Russian crude oil exports from Black Sea ports, which occurred in December 2022 - the first month after the EU embargo and the price cap on Russia’s oil exports to other countries (in case European oil tankers and insurance companies are used for this) came into effect. This growth occurred mainly due to India.

For a relatively small volume of crude oil exports from the Black Sea in December 2022, Russia managed to replace 2/3 of the Greek oil tankers that previously shipped Russian oil to non-EU countries with vessels from non-European states. In December 2022, 24.7% of this oil was subject to the price cap, and 75.3% of the oil did not fall within the scope of the restriction as it was transported by tankers that did not belong to EU shipowners.

The full text of the report

As we reported earlier, in December 2022, and in particular after 5 December 2022, when the embargo came into effect, there wasn’t any significant decline in seaborne exports of Russia’s crude oil from the Black Sea to EU countries.

It remained at the level of 1 million tons, the same as in November 2022.

Violations of the embargo by Greece, Spain, and Italy, which were reported, were the main factor behind this seemingly strange phenomenon.

At the same time, in December 2022, the exports of Russia’s crude oil from the Black Sea to non-EU countries increased by 0.4 million tons (27.7%) compared to November 2022 and amounted to about 1.9 million tons.

This was not the highest volume, as the maximum export volume reached about 2.3 million tons in June and September 2022.

Thus, the total volume of Russia’s crude oil exports from Black Sea ports in December 2022 – the first month after the EU embargo and the price cap on Russia’s oil exports to other countries (in case European oil tankers and insurance companies are used for this) came into effect – increased compared to November and amounted to about 2.9 million tons (See Table 1 for details).

The increase in Russian crude oil exports from Black Sea ports in December 2022 occurred mainly due to India. This country has been the largest importer of Russian seaborne crude oil (See Table 2 for details).

Now, let’s look at who transported Russia’s crude oil from the Black Sea to non-EU countries in December 2022, after the price cap was introduced.

Starting from 05 December 2022, when the price cap was imposed, 10 tankers with Russian crude oil left the Black Sea for non-EU countries. The breakdown of these oil tankers by country of shipowner registration is as follows.

• Greece – 3

• Hong Kong, China – 2

• The United Arab Emirates – 2 (of which 1 tanker is registered with a subsidiary of the Russian company Sovkomflot/Novoship)

• Russia – 1

• Turkey – 1

• India – 1

According to our monitoring data, in December 2022, starting from 5 December 2022, the date of the price cap introduction, about 1.3 million tons of Russian oil were transported to non-EU countries. 24.7% of this oil was subject to the price cap, and 75.3% of the oil did not fall within the scope of the restriction as it was transported by tankers that did not belong to carriers from the EU. In absolute numbers, these were 3 and 7 tankers respectively (See Table 3 for details).

In the previous month, November 2022, Russia’s crude oil was transported to non-EU countries by 14 tankers, 9 of which, i.e. 64%, belonged to Greek shipowners.

Thus, for a relatively small volume of crude oil exports from the Black Sea in December 2022, Russia managed to replace 2/3 of the Greek oil tankers with vessels from other countries.

Note that among these tankers, we have not recorded any that could be confidently assumed to belong to the so-called "grey fleet," which had allegedly been purchased by Russia to circumvent the price cap.

And in conclusion, a few words about forecasts.

According to preliminary estimates by the Monitoring Group, in January 2023, Russia's seaborne crude oil exports from the Black Sea will increase significantly. This growth will be from 15 to 35%, and the volume of exports will reach 3.4-4.2 million tons compared with 2.9 million tons in December 2022 - depending on how many tankers with Russian crude oil will pass through the Turkish straits in the last days of January 2023.

In our next article in a few days, we will be able to look at the situation in more detail.

Table 1. The volume of Russia’s crude oil exports from Black Sea ports in April-December 2022

Table 2. Exports of Russia’s crude oil from Black Sea ports to non-EU countries in April-December 2022

Table 3. Shipping of Russia’s crude oil from the Black Sea in December 2022 to non-EU countries (shipping after the price cap came into effect is highlighted in grey)

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Important notes:

a) The Russian Federation exports crude oil and petroleum products (fuel oil, gas oil, solar oil) from the ports on the Black and Azov Seas. They are exported by different types of vessels – crude oil tankers and oil/chemical tankers (or oil products tankers) respectively. Crude oil tankers are usually very large: in the Black Sea, one such tanker takes from 100 to 150 thousand tons of crude oil. Oil products tankers have a significantly lower freight-carrying capacity: the commonest are in the ranges of 3-5 and 25-30 thousand tons. The monthly ratio between the volume of exports of Russia’s crude oil and petroleum products is approximately 3:1.

b) Two separate streams of crude oil are exported from Black Sea ports: crude oil of the Russian Federation (from the ports of Novorossiysk, Taman, and Tuapse, from the transshipment points in the Kerch Strait and to the south of it) and crude oil of the Caspian Pipeline Consortium (CPC) - from a separate terminal of the port of Novorossiysk. The CPC’s crude oil contains 80% of Kazakh oil and 20% of Russian oil. Russian oil is under international sanctions. Kazakh oil is not under sanctions, and this mixing creates a potential problem. For more details, see https://www.blackseanews.net/en/read/191374

c) In tables and figures presenting the volume of crude oil and petroleum products exports, the term DWT (deadweight) is used - a measure of how much weight a ship can carry. It is the sum of the weights of cargo, fuel, lubricants, technical and drinking water, passengers, luggage, crew, and provisions. When analysing the transportation of large volumes of oil and petroleum products, other types of cargoes carried by a ship do not significantly influence the results, since even on tankers with a deadweight of 100-150 thousand tons, the sum of the weights of fuel, water, provisions, and a small crew is in the hundreds of tons and does not affect the results of the analysis.

d) This analytical report does not take into account the export volume of crude oil and petroleum products from the Russian Federation to the Black Sea ports and transshipment points of Romania and Bulgaria.
Reference: In July 2022, these exports were estimated to be around 3.1 million tons (1.9 million tons to Romania and 1.2 million tons to Bulgaria). Of these volumes, Russia’s crude oil accounted for about 2.4 million tons (1.4 million tons to Romania and 1.0 million tons to Bulgaria).

e) In tables and figures, for convenience, the term "EU+" is used, which covers not only EU member states but also the USA, the UK, and Monaco. The appropriateness of such grouping is justified by the fact that the exports of oil and petroleum products of the Russian Federation to these countries are very insignificant.

f) In the database of oil tankers at the end of the article, “Crude oil tanker CPC” means that this tanker carries oil from the Caspian Pipeline Consortium’s terminal. Tankers carrying crude oil of the Russian Federation are marked as "Crude oil tankers."

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This article has been prepared with the support of the European Union in Ukraine. The content of the article is the sole responsibility of the authors and does not necessarily reflect the position of the EU