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Lower oil prices and steeper discounts for Russian oil sent Russia’s oil revenues down in November despite the highest export volumes since April this year, the International Energy Agency (IEA) said on Wednesday.
Last month, total oil exports out of Russia rose by 270,000 barrels per day (bpd) from October to 8.1 million bpd in November, pushed up by higher diesel exports, the IEA said in its closely-watched Oil Market Report for December. Russian diesel exports increased by 300,000 bpd to 1.1 million bpd in November, two months before the EU embargo on seaborne imports of Russian products.
Total Russian exports in November stood at their highest levels since April 2022, the IEA said. However, Russia’s oil export revenues fell by $700 million to $15.8 billion due to wider discounts on Russian crude and lower international crude oil prices, according to the IEA’s estimates.
Russian oil prices saw steeper declines in November. Urals in Northwest Europe fell by nearly $30 per barrel to $43 a barrel by early December, well below the $60 per barrel price cap finally agreed by G7, Australia, and the EU, per IEA assessments.
Russia’s crude oil loadings were essentially little changed in November compared to October, at just over 5 million bpd, as record shipments to India offset lower exports to the European Union. Loadings to the EU dropped by 430,000 bpd to 1.1 million bpd, but exports to India hit a record of 1.3 million bpd, the IEA said.
Looking forward, another price rally may be in the making as the full effect of the bans on Russian exports takes effect early next year, according to the IEA.
“While lower oil prices come as a welcome relief to consumers faced by surging inflation, the full impact of embargoes on Russian crude and product supplies remains to be seen. As we move through the winter months and towards a tighter oil balance in 2Q23, another price rally cannot be ruled out,” the agency added.
