Despite sanctions, Russian crude oil supplies witness 50% hike

ByAl Mayadeen English – 25/09/2023

Russia’s oil revenues are expected to rise due to continuous crude price hikes and a decrease in discounts on its oil.

Despite G7 countries imposing anti-Russia sanctions over the Ukraine war, Russian crude oil supplies saw a 50% increase this spring, the Financial Times highlighted, citing data from analytics company Kpler.

Last December, the European Union, G7 nations, and Australia set a price cap of $60 per barrel on Russian oil. Nonetheless, Russia’s oil revenues are expected to rise due to continuous crude price hikes and a decrease in discounts on its oil, according to the FT report, referencing estimates from the Kyiv School of Economics (KSE).

The news website highlighted that in August, nearly three-quarters of seaborne Russian crude flows took place without Western insurance.

Russia has adjusted its seaborne diesel and gasoil exports, and a recent temporary ban on gasoline and diesel exports to most nations is likely to tighten supplies further.

It has also explored new export avenues, including selling CPC Blend crude to the UAE, circumventing Western sanctions, Reuters cited four traders as saying. Despite these sanctions, Russia has redirected most of its oil to China, India, Turkey, and other countries over the past year.

According to the four traders, Lukoil and CenGeo, two Russian firms, sold CPC Blend oil to the UAE in August and September. This particular grade is predominantly produced in Kazakhstan and supplied to global markets via Russia’s Black Sea port of Yuzhnaya Ozereyevka. It is noteworthy that the UAE has not joined Western sanctions against Russia.

The US Office of Foreign Assets Control (OFAC) clarified that CPC Blend oil from Kazakhstan was not subject to sanctions and recommended that buyers seek certificates of origin.

However, this US warning only applies to buyers adhering to sanctions. Two unnamed traders mentioned that CPC crude from Russia was sold at a discount compared to Kazakh cargoes.