Russian oil exports from its main ports, Primorsk and Ust-Luga, have dropped by 41% in the last month and are expected to continue declining, according to a report from Bloomberg on Tuesday.
This decline is part of Russia’s efforts to comply with production cuts agreed upon by the OPEC+ oil cartel. Russia plans to further reduce its oil production in the coming months to compensate for previously exceeding its OPEC+ quota, sources told Bloomberg.
Historically, Russia has adhered to OPEC’s guidance. In March, during a series of production cuts, President Vladimir Putin supported OPEC+’s efforts to stabilize oil prices but expressed concerns about losing market share to the United States.
This year, Russian crude exports have decreased by about 30,000 barrels per day compared to last year’s average and have dropped by 620,000 barrels per day since peaking in April.
The decrease in Russian crude oil exports is also influenced by recent sanctions from Ukraine against Russian oil supplier Lukoil. Lukoil has diverted some oil flows to European countries like Hungary and Slovakia, which could lead to a potential increase in exports as the oil passes through Ukraine.
Additionally, the UK has recently sanctioned tankers transporting oil from Russia, including those in Russia’s “shadow fleet.” Over 60 tankers carrying Russian crude are now under sanctions.
These sanctions have caused refiners in countries like India to refuse deliveries of Russian oil.
Sanctions on Russian energy aim to reduce the revenue needed to fund the war in Ukraine and have intensified since the conflict began in 2022. In 2023, Russia accounted for about 12% of global crude oil production, making it the third-largest crude producer in the world, according to Statista.