Russia witnesses a huge drop in oil exports

Russian oil exports were down 11 percent during the first 20 days of December, after the European Union’s embargo on seaborne Russian oil came into force.

But the figures shared by the Russian newspaper Kommersant on Wednesday do not show the real picture as the restrictions came into effect on Dec 5.

According to the data compiled by Bloomberg, Russian oil exports have tumbled by more than half.

In the week ending Dec 16 which marked the first full week after the ban set in, total volume coming out of Russia fell by 1.86 million barrels a day, or 54 percent, to about 1.6 million. The four-week average also dropped to a new low for 2022.

Moreover, there is also a shortage of ship owners willing to transport Russian oil from an export facility in Asia.

However, the data must be viewed cautiously, as variables like weather and cargo scheduling can sway week-over-week changes in flows.

The EU has banned imports of Russian oil by sea and blocked shipping and related financial services for companies transporting Russian oil. At the same time, the EU and the G7 imposed a $60-per-barrel price cap on Moscow’s crude.

As far as the Kommersant report is concerned which cited unnamed sources, Russia’s exports to non-CIS countries – covering both pipeline and sea-borne shipments – totalled around 560,000 tonnes per day during the period.

CIS stands for the Commonwealth of Independent States which include Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan.

The EU’s embargo on Russian oil purchases came in a move Brussels says will cut the bloc’s imports of Russian oil by 90 percent.

Before Russia sent tens of thousands of troops into Ukraine in February, Europe bought around half of all Russia’s oil exports.

Moscow, which calls its action in Ukraine “a special military operation”, has rapidly shifted its energy trade eastwards this year, selling record volumes to countries like India and China.

The Kremlin hopes sustained demand from countries in Asia can compensate for lost supplies to Russia’s traditional European customers.

Earlier, the International Energy Agency (IEA) had said Russian oil revenues fell Nov despite a boost in production to just below levels before the invasion of Ukraine – a development that came before the ban.

The IEA estimated that Russia earned about $15.8 billion from oil sales in November, the second lowest this year after $14.7 billion in September.

The revenue fall came despite a rise in Russia’s exports of crude oil and products to 8.1 million barrels a day, the highest level since April, two months after Russia invaded Ukraine.

The story was filed by the News Desk. The Desk can be reached at info@thecorrespondent.com.pk.

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