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Russian Crude Oil Trade Shrinking

Russian Crude Oil Trade Shrinking

The Russian crude oil export trade has been yet another reason of frustration for tanker owners, as a dismal 2020 is now been followed by an even worse 2021 so far. In a recent weekly report, shipbroker Banchero Costa said that “2020 was overall a very negative year for crude oil trade. Total loadings in the 12 months of 2020 were down -6.2% y-o-y to 2032 million tonnes, according to vessels tracking data from Refinitiv. 2021 so far is faring even worse. In the first 6 months of 2021, global seaborne crude oil trade declined by -8.9% y-o-y to 964.8 mln tonnes”.According to Banchero Costa, “what’s worst is that so far there is no sign of things turning a corner. The first quarter of 2021 recorded a -12.0% y-o-y decline to 478.1 mln t. In April 2021 trade was even more disappointing, as crude oil loadings were down -16.2% y-o-y from the same month in 2020, at 162.0 mln t. In May 2021, things might appear as if they were stabilizing, as loadings were down only -1.2% y-o-y compared to May 2020, as well as up +3.3% monthon-month, at 167.3 mln tonnes. In June 2021, global crude oil loadings were 160.3 mln tonnes, which was nominally +4.9% y-o-y compared to June 2020, BUT it was down -3.1% month-on-month from May 2021, and -11.7% from June 2019”.

Source: banchero costa &c s.p.a.

The shipbroker said that “Russia is the second largest seaborne exporter of crude oil in the world after Saudi Arabia, accounting for 10.7% of global shipments. In the 12 months of 2019, Russian seaborne crude oil exports reached a peak of 225.1 mln tonnes. In 2020, however, limited global demand due to the pandemic affected shipments. In the 12 months of 2020, Russia managed to ship just 191.0 mln tonnes of crude oil (excluding domestic cabotage), down -15.1% year-on-year. This was a worse performance than most of its competitors. Saudi Arabia’s exports declined by just -3.2% y-o-t in 2020, those from the rest of the Arabian Gulf declined by -9.2% last year, from West Africa they were down by -9.2% y-o-y. The only major exporter which performed well last year were the Unites States, with exports increasing by +7.1% y-o-y”.

“The main reason for this discrepancy is the different mix of clients. Russia unfortunately is very dependant on the West European market, which was particularly hit by the pandemic last year. Back in 2019, the European Union was the destination for 61% of Russia’s seaborne crude exports, with just one third going to Asia. For Saudi Arabia, on the other hand, 80% of exports go to Asia, whist just 6% or 7% go to the EU, either directly or indirectly. The USA also saw declining shipments to Europe, but this was more than compensated by surging volumes to the likes of India and South Korea. Things improved a bit so far in 2021. In the first 6 months of 2021, crude oil exports from Russia were down just -8.3% y-o-y from the same period of 2020, at 96.6 mln tonnes (excluding domestic cabotage). This was also less than the 113.7 mln tonnes shipped in the first half of 2019, and also the 104.2 mln tonnes in the same period of 2018. The decline recorded by Russia so far in 2021, is however well below that seen by Saudi Arabia (-17.1% y-o-y in the first half of 2021), or by West Africa (-19.9% y-o-y)”.

Source: banchero costa &c s.p.a.

Banchero Costa added that “also, the trend is positive, as monthly volumes kept increasing. In the first quarter of 2021 Russia exported 46.4 mln tonnes, which represents a decline of -15.9% y-o-y from the same quarter last year. The second quarter of 2021 saw 50.2 mln tonnes shipped from Russia, which was an increase of +0.2% y-o-y. In June 2021 shipments reached 17.8 mln tonnes, which was +22.0% y-o-y higher than in the same month last year. In terms of destinations for the shipments, the EU27 is still top, accounting for 58% of volumes so far this year. Exports from Russia to the EU declined by -5.1% y-o-y in the first 6 months of 2021 to 56.1 mln tonnes. Volumes to Mainland China are down by -27.5% y-o-y to 13.9 mln tonnes, although this rather reflects the exceptionally high volumes seen last year which were 19.2 mln tonnes. The equivalent for 1H 2019 was 14.0 mln tonnes, and for 1H 2018 was 11.1 mln tonnes”, the shipbroker concluded.
Source : Nikos Roussanoglou, Hellenic Shipping News Worldwide

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