Russian Oil Exports Edge Upwards

Russian data showed yesterday that the world's second largest oil exporter has begun to edge up its crude exports in May, in line with its aim to gradually ease the supply curbs it had agreed with Opec.

A source close to the Energy Ministry said Russian crude exports via the state pipeline monopoly Transneft rose in May by only 30,000 barrels per day (bpd) from April volumes.

However, the source and traders said real volumes of crude exports were likely much higher as the Transneft system was pumping oil almost at capacity while oil firms were successfully using many alternative routes.

"Transneft has almost reached its capacity and its volumes (of exports) we see now will be about the same for the rest of the year," the source said.

A senior Western trader agreed: "The thing to watch now is how many new routes Russian oil firms will design to bypass Transneft in a situation when oil output keeps booming".

Russian oil exports only via Transneft rose slightly in May to 11.391 million tones (2.69 million bpd) from 10.894 million tonnes (2.66 million bpd) in April.

Volumes of exports, including transit volumes from neighbouring Kazakhstan and Azerbaijan, as well as deliveries by rail, were also up in May to 13.105 million tonnes from 12.550 million tonnes in April.

Transit volumes in May, mainly from Kazakhstan, Azerbaijan and Turkmenistan, were even slightly down from April at 1.465 million tones compared with 1.542 million tonnes.

The total also included 247,000 tonnes or 59,000 bpd of Russian crude that bypassed Transneft by rail or small ports, up from 114,700 tonnes or 28,000 bpd in April.

Russia's Energy ministry has said it was able to monitor only a small part of crude exports bypassing Transneft.

Russia agreed to help Opec prop world oil prices by cutting exports by around five per cent or 150,000 bpd in January-June, but said in May it would gradually abandon the deal.

Authorities have said they are using the Russian-only oil exports via Transneft to measure exports in the deal with Opec to cut supplies.

They say the benchmark for Russia's promised 150,000 bpd cut is based on peak exports of 2.69-2.70 million bpd last summer.

Experts said Russia de facto abandoned the accord with Opec in March when it exported a record 2.73 million bpd of its own crude and 3.18 million bpd along with transit and rail volumes. Most Russian private sector firms still harbour ambitious output growth plans and domestic consumption is barely increasing.

The source said Russia's crude oil and gas condensate output, which is rising for the fourth consecutive year, rose again in May to 31.456 million tones (7.44 million bpd) from 30.197 million tonnes (7.38 million bpd) in April.

Traders said oil firms managed in May to overcome rail queues near major ports to improve deliveries.

"Many oil firms such as (Russian largest oil producer) Lukoil have also said they expected record oil products shipments in May," a Russian trader said.

Russian firms are currently using every route to ship more crude and oil products abroad, including small ports like Vitino and Murmansk in the far north and Feodosia on the Black Sea. Other factors in May were the release of a secret and rare additional oil export allocation and what traders described as "chaos" in the Latvian port of Ventspils.

Russian Prime Minister Mikhail Kasyanov signed a secret resolution in May granting state oil firms Rosneft and Zarubezhneft an additional export allocation for 700,000 tonnes for May and June.

The revenues fom the deal will help Russia shut down its communications base on Cuba used during the Cold War.

"We have not seen additional export allocations since 2000. Now many oil firms might start lobbying for extra exports using the Rosneft-Zarubejneft case as example," a Russian trader said.

Another trader said he hoped there would be no repeat of a row between Russian officials that forced several firms to reschedule May cargoes from Ventspils to different ports.

Visit to

&to=' target=_blank>OPEC

&to=' target=_blank>TRANSNEFT

Subscribe to Pravda.Ru Telegram channel, Facebook, RSS!

Author`s name Editorial Team