According to the latest report by the International Energy Agency (IEA), Russian oil exports fell by 115 kb/d in July to 7.4 mb/d, from about 8 mb/d at the start of the year. That decline is nowhere near the 2-3 million b/d slump predicted by some experts. The country’s crude and oil product flows to the US, UK, EU, Japan and Korea have slumped by nearly 2.2 mb/d since the outbreak of the war, two-thirds of which have been rerouted to other markets. Export revenues fell from 21 bn in June to $19 bn in July, on both reduced volumes and lower oil prices.
Exports to India have been able to make up for much of the reduced flows to western nations. New reports have emerged that during the second quarter, India slashed its crude imports from the United States by one million metric tonnes while sharply ramping up imports of discounted Russian oil.
India’s energy mix now looks dramatically different from a year ago. Last year, Russian oil in India’s crude basket amounted to a paltry 2.2%, while the U.S. was 9.2%; right now, Russia accounts for nearly 12.9% of India’s crude imports, while the U.S. share has tumbled to just 5.4%.
Revenues are at 90% of previous levels.
Now Rystad’s prediction
Russia has so far demonstrated high resilience to the unprecedented pressure imposed by Europe and the US – but the worst is yet to come, according to Rystad Energy research.
After a sharp drop of 1 million b/d in April, Russia has aggressively ramped up oil production in June and July, with total output in July almost recovering to the level seen before Russia’s war with Ukraine began in late February. The significant increase was largely due to higher refinery output, while crude exports contracted after reaching record levels of more than 5 million b/d in April and May. Rystad Energy’s new estimate for average Russian crude production in 2022 is 9.6 million b/d, 200,000 b/d higher than expected in June, but the impending European Union (EU) import embargo and domestic economic challenges imply major obstacles lie ahead.
**trading operations with Russian crude dropped off the radar after February, making it difficult to track the spreads between Russian blends and benchmarks, Rystad Energy said.**Price reporting services have been reporting various numbers: Argus had the Urals discount to Brent in July reduced to $15/bbl, while Platts and Reuters did not change their estimates between $30/bbl and $40/bbl.
It appears Rystad is using their crystal ball in their prediction. Doesn’t mean their prediction will come to past.
Rystad Energy admits:“Rystad Energy still expects that Russia will be able to redirect a significant portion of crude volumes – or 75% in the base case – to Asia & other markets.
Russian export losses are estimated at only 500,000- 600,000 b/d by December 2022.”
So a 25% prediction decline.
Oil production & markets are dynamic ever changing. If Iran cuts a nuclear deal with the West, the Saudis & other OPEC nations will cut production to match the new Iran oil flow:https://www.reuters.com/markets/commodities/with-iran-deal-l…
Meanwhile is making a gas deal with Iran & the article talks about a new Russia-China gas pipeline that break ground within 2 years:https://markets.businessinsider.com/news/commodities/russia-…
Personally I believe a nuclear with Iran is unlikely as Iran cozy ups with Russia. And the fact that the US is trading attacks with the Iranians in Syria. Come again-Why are we still in Syria illegally? Illegal? The U.S. military presence in Syria is unauthorized by Congress and has no international mandate. What an illogical shytty mess.