Russian Oil Revenue Hit as Exports Drop to 5-Month Low, IEA Says

Russia’s April exports of oil and petroleum products dropped to levels last seen in late 2023 putting pressure on the nation’s oil revenues

The country exported a total of 7.3 million barrels a day last month, down 6.4% from March, the Paris-based agency said in its monthly report published Wednesday. That’s Russia’s lowest oil exports in five months, the IEA estimates show.

The bulk of the decline came from product flows, which dropped by almost 15% to 2.3 million barrels a day, from March, the data showed.

Higher prices for Russian crude and fuel have partly offset the impact of lower exports on its revenues. Still, in April the nation earned $17.2 billion from oil exports, down from $18.4 billion the month before, according to the agency’s calculations.

The oil industry is a key source of revenue for the Russian budget, burdened with higher military and social spendings as the invasion in Ukraine is well into its third year. In a move to limit Moscow’s ability to fund the war, Ukraine and its allies in the West have been aiming to disrupt the flow of petrodollars to Russian coffers.

Since the start of the year, the government in Kyiv has been targeting key Russian refineries with drones, a strategy that initially led to significant damages to the oil-processing facilities and drops in output. More than a year ago, the West put price caps on Russian barrels, limiting access to western insurance and shipping services for the producers, traders and buyers who didn’t stick to the price limitations.

The strategies have only been partially successful, the IEA report shows.

“Russian refineries escaped heavy production losses” amid the drone attacks, the Paris-bases agency said. It estimated the nation’s refinery runs in April at around 4.9 million barrels a day compared with 5.2 million barrels a day in March due to the recent strikes.

The agency also revised down its estimates for the effect of the attacks on the Russian refinery runs.

“We now estimate that the impact of drone strikes will be limited to 150-200 thousand barrels a day on average” during the second quarter of 2024, it said.

Quicker-than-expected restarts of the damaged Russian facilities, including a reported return of Rosneft PJSC’s Tuapse refinery, and the nation’s “ability to use spare crude processing capacity, appear to have contributed to this less severe impact on crude throughputs,” the agency said.

The Western price restrictions on Russian barrels also continue to have limited impact on the flow of its petrodollars, the IEA data shows. Average weighted export prices for all Russian crude blends in April rose month-on-month and remained above the G7 price cap, the agency said.

“Premium product prices remained below the price cap, while discounted products exceeded their price cap,” it said.

Russian exports were also impacted by voluntary output cuts within its agreements with the Organization of Petroleum Exporting Countries and their allies. “Russia carried out some of its promised 2Q24 OPEC+ production cut,” the IEA said.

Russia’s crude-only output in April reached 9.3 million barrels a day, the agency said. While it represented a 150,000 barrel-a-day drop compared with the month before, it was still 200,000 barrels a day above its implied target, the IEA said.

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