August shipments from Primorsk, Ust-Luga and Novorossiysk are projected at about 2.7 million bpd, but higher tanker costs, Black Sea security risks and limited vessel availability could cap the increase.
Russia's crude exports from its western ports are expected to rise about 4% month on month in August to roughly 2.7 million barrels per day from 2.6 million bpd in July, according to traders, as refinery outages and firm Asian demand send more barrels into export markets. At the same time, freight rates for Urals crude shipments to India have jumped about 50% since mid-July, with Aframax cargoes from Primorsk rising to about $13 million from $8 million to $9 million and Suezmax cargoes from Novorossiysk climbing to around $15 million from about $10 million. Traders said Ukrainian attacks in the Black Sea and on Russian refineries have disrupted loadings, tightened tanker availability and pushed port loading capacity toward its limit. Reuters calculations indicate the higher freight bill could cut Russia's export revenue by about $5 per barrel or more. Demand in Asia has remained firm, with Urals discounts for late-August through September loading to India narrowing to $2-$3 a barrel below Brent futures, while Chinese refiners resumed buying Russian crude and two major Chinese refiners bought most September-loading ESPO Blend cargoes at narrower discounts.