Russian crude exports surge ahead of OPEC+ production review
Quantum Commodity Intelligence – Russia's crude oil exports remained at elevated levels during May, according to ship-tracking data, with compliance for previously-announced cuts set to be a key factor in preserving the OPEC+ alliance.
According to Bloomberg data, four-week average seaborne shipments from Russia climbed higher in the period to 4 June, rising to 3.73 million bpd from a revised 3.68 million bpd in the period to 28 May.
Bloomberg said flows to international markets were up 1.4 million bpd since the end of last year, a figure above what can be accounted for by the diversion of pipeline flows or lower refinery runs.
Likewise, Russia's seaborne oil exports from the Baltic ports of Primorsk and Ust-Luga, along with Novorossiisk in the Black Sea, reached a four-year high of 2.4 million bpd in May, according to Refinitiv Eikon data.
Russia has claimed on a number of occasions it was abiding by its voluntary pledge to cut oil output by an additional 500,000 bpd from March until the end of the year, but data suggests otherwise.
The future of OPEC+ harmony is seen as dependent on Russia reining in production and making the cuts it has pledged, amid growing concerns within the group that Moscow is not holding up its end of the deal.
The WSJ reported last month on a growing rift between Saudi and Russia that could potentially fracture relations within the OPEC+ group, as Moscow continues to pump and export crude volumes above agreed levels.
At Sunday's OPEC+ meeting, the Gulf powerhouse announced a further cut of 1 million bpd for July in what Energy Minister Prince Abdulaziz described a "Saudi lollipop", whereas Russia only pledged to maintain current cuts.
Lollipop
OPEC+ has appointed three independent analysts IHS, Wood Mackenzie and Rystad Energy to study the individual capacity and production levels of each member. Ostensibly, the move is to help realign baseline levels, but Riyadh will be closely monitoring Russia's compliance levels.
"There are reports saying the Saudis are 'fed up' with OPEC partners that continue to fail to meet their output goals but more importantly reports that the Saudis are demanding 'more transparency' from Russia regarding their oil production," said Phil Flynn, senior market analyst at The Price Futures Group.
"That is raising questions as to whether or not the Saudis will maintain the OPEC cut that they are mainly carrying on their back," added Flynn.
Meanwhile, India's imports of Russian crude reached a new record of 1.96 million bpd last month, according to data from Vortexa.
Urals export prices averaged $53.34/b in May, according to the Russian Finance Ministry, whereas Quantum's monthly average price for Dubai was $74.93/b.
