Sanctions hit Russian oil: exports fall, storage facilities fill up
Нафта
Russian oil producers are facing a shortage of oil storage capacity due to increased US and EU sanctions pressure and falling exports.
Reuters reports this.
The agency notes that if current restrictions remain in place, Moscow may face the need to reduce production in the coming months. Russian oil exports by sea fell from 3.8 million barrels per day in December to 3.4 million in January and about 2.8 million in February.
Meanwhile, crude oil storage on tankers has risen to more than 150 million barrels, with some vessels slowing down, indicating a slowdown in demand.
India, which became the largest buyer of Russian oil last year, is also reducing purchases. While in 2024 it imported about 1.7 million barrels per day, in January the volume decreased to 1.1 million. From March, analysts predict a further decline.
Russia’s above-ground storage facilities, estimated by Kpler based on satellite data, are about half full and hold about 16 million barrels. With the pipeline system, the potential capacity could increase to 100 million barrels, but this may not be enough if exports remain limited.
Russia produces about 9.3 million barrels of oil per day, about half of which it exports. In such conditions, overproduction could force companies to cut production.
Rystad Energy analysts predict that production could decrease by 300,000 barrels per day from March to May.
Oil and gas revenues provide almost a quarter of Russia’s federal budget. In January, these revenues fell by half compared to last year and reached their lowest level since the summer of 2020.
As previously reported, Greece and Malta have become the main obstacles to the European Union’s proposal to replace price caps on Russian oil with a ban on services necessary for fuel transportation.
As a reminder, the European Union is planning to further tighten sanctions against Russia. The bloc is seeking to impose restrictions on two ports in Georgia and Indonesia for operations with Russian oil.
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