Russian seaborne oil exports from its four core ports may have increased by about 8% last year against 2022, according to the country’s state-run pipeline operator Transneft.

Export flows have largely sidestepped the price cap shipping restrictions imposed by G7 and Australia.

Russia’s Finance Ministry said earlier this week that the average sale price of the country’s Urals crude blend for the whole of 2023 came at $63 per barrel, or above the approved price cap of $60 per barrel.

As such, export revenues contributed significantly to state finances.

Transneft, which delivers oil to ports directly via the country’s pipeline network, said that the country’s far east port of Kozmino posted the largest throughput increase of more than 9% to about 880,000 barrels per day of oil last year against 2022.

Light and sweet oil from West Siberia that reaches Kozmino via the East Siberia–Pacific Ocean pipeline, and is known as the ESPO blend, is usually exported to China and India, and other destinations in Asia.

Export shipments of another dominant Russian oil blend, heavy and sour Urals, from two Russian ports on the Baltic Sea, Ust-Luga and Primorsk, increased by 9% and 7% respectively, with both outlets sending about 1.6 million bpd from the Russian trunkline network to global markets.

Finally, exports of Urals from the Black Sea port of Novorossiysk increased by 3% to 600,000 bpd last year despite loading operations being idled for almost four months because of adverse weather conditions, Transneft said.

According to Transneft, shipments from Novorossiysk and Ust-Luga also included transit oil barrels from Kazakhstan that the country sends into the Russian network via a dedicated pipeline connection, known as Atyrau–Samara.

Oil transit

Transneft has not indicated the share Kazakh transit oil had within the total Russian seaborne exports. As such, it is hard to assess the exact volume of Russian exports from the total shipments reported at Novorossiysk and Ust-Luga.

However, Kazakhstan’s pipeline operator Kaztransoil reported earlier that it moved about 200,000 bpd of Kazakh oil via Atyrau–Samara between January and September 2023.

According to Kaztransoil, about 16,000 bpd of that volume was sent via the Russian network and the Druzhba (Friendship) pipeline to Germany during this period, suggesting that the remaining volume was shipped internationally via Russian ports.

This implies Russian seaborne exports from the four ports connected to the domestic trunkline network may have risen to 2.88 million bpd in 2023 – which is almost 8% higher than the previous year.

Transneft has assessed the annual increase of shipments via the four ports at 7.2% – however, it calculated it based on tonnes transported, without taking into account that a tonne of the ESPO Blend contains more barrels of oil than a tonne of Urals.

This figure does not include Russian oil blends that were shipped globally from Murmansk, in the north of Russia, and the ports of De-Kastri and Magadan in the far east of the country.

Last July, Russian deputy prime minister in charge for energy issues, Alexander Novak, announced that the country was implementing a 300,000 bpd reduction in its oil exports to international markets.

In December, Novak said that the export reduction would continue in 2024 and may grow to 500,000 bpd, encompassing other products besides crude oil.

Transneft said in a statement that Russia sent another 820,000 bpd of oil to China in 2023 via a dedicated pipeline connection from the East Siberia–Pacific Ocean pipeline. This volume was reportedly unchanged from 2022.

Druzhba pain

While not addressing directly the impact of the European embargo on Russian oil imports, Transneft said that Russian oil shipments via the Druzhba pipeline to Eastern Europe declined by 60% last year against 2022.

Poland and Germany halted purchases of Russian oil via Druzhba entirely, though the northern leg of this pipeline has continued to operate, delivering transit barrels from Kazakhstan to Germany.

Russian oil producers have also kept shipping their oil to Hungary and Slovakia via the southern leg of Druzhba as these countries received a European exemption from enforcing the embargo.

With the Druzhba decline, the total volume of Russian oil that was exported via its pipeline network dropped 6.5% last year against 2022, Transneft said.

The company added that oil pipeline supplies to Russian refineries rose by over 2%, with export shipments of oil products which were handled by the operator jumping 13% last year.