Russia’s crude oil export earnings have seen a significant drop of nearly 30% since the end of June, according to Bloomberg estimates. This decline is primarily due to the decrease in international benchmark prices, which have reduced the value of cheaper Russian crude oil grades.
Despite an increase in export volumes, the recent dip in oil prices has not been compensated for. Russia’s main crude oil, Urals, is now being traded below the $60 per barrel threshold set by the EU and the U.S. This price cap is applicable if Russia utilizes Western shipping, insurance, and financial services for crude oil transportation.
The Brent Crude price, which is a key benchmark, has fallen to the low $70s per barrel. This drop, after reaching a near-three-year low of under $70 per barrel last week, has affected the price of Russian crude as well.
Urals crude oil prices fell for the second consecutive week, decreasing by $3 per barrel. This has led to reduced revenues for Russia, even with a slight increase in seaborne crude oil exports, as noted by Bloomberg’s Julian Lee.
Data from tanker tracking and port agent reports compiled by Bloomberg show that Russia’s crude oil shipments averaged 3.21 million barrels per day over the four weeks leading up to September 15. This is an increase of 80,000 barrels per day compared to the previous four-week average.
Weekly seaborne exports, which can be more variable due to the nature of crude loading and shipping, increased by 110,000 barrels per day in the week ending September 15, as per the data. However, this rise in export volumes was not enough to counterbalance the sharp decline in oil prices, resulting in lower revenues for Russia.
Bloomberg’s estimates indicate that the four-week average for oil revenues has reached its lowest point since February, falling to approximately $1.5 billion per week, as reported by Lee.
As part of the OPEC+ agreements, Russia is reducing its oil production. However, it has produced more than its quota so far this year and has committed to compensating for this overproduction in the coming year.