Disrupted refining boosts Russian oil exports in March

Russian oil companies significantly increased offshore oil exports to 3.8mn barrels per day (bpd) in March 2024 amid refinery utilisation problems, up by 5% year on year and making the highest oil exports since May 2023, according to Kommersant daily citing Kpler data.

To compare, in January and February 2024, Russia exported 3.5mn bpd and 3.3mn bpd by sea tankers respectively.

As covered by bne IntelliNews, Russia’s federal budget deficit shrank to RUB607bn ($6.7bn) in the first quarter thanks to high oil prices that pushed up oil and gas revenues by 80%.

In addition, in March Russian oil producers were forced to significantly increase oil exports amid the loss of capacity at refineries amid Ukrainian drone strikes. The Energy Ministry expects the damaged units to be put back into operation by June, according to Kommersant.

Kommersant also reminds that in 2Q24 Russia will have to reduce oil production and exports under the OPEC+ agreement. Thus, in June, oil production should be reduced to 9mn bpd, according to Deputy Prime Minister Alexander Novak. 

According to OPEC estimates, oil and condensate production in Russia will decline by 1.6% to 10.75mn bpd in 2024, and the output in Russia was planned to be gradually cut from April.

In April it is planned to reduce oil output by 0.35mn bpd and exports by 0.12mn bpd, in May by 0.4mn bpd and 0.07mn bpd, while cutting the output in June by 0.47mn bpd and maintaining the exports unchanged. 

In 2023 Russian oil companies preferred to cut oil exports rather than production and channel additional crude volumes to domestic refineries. As a result, oil production by the end of 2023 decreased by only 1% to 530mn tonnes.

However, the ongoing disruptions at the refining capacities, Russian oil companies will have to cut output due to OPEC+ deal commitments, Kpler's Victor Katona argued to Kommersant.