FSU Oil Trade in December 2011

Total FSU crude exports increased in November by 221 tb/d, or 3.4%, m-o-m to 6.68 mb/d. The increase can be seen as being mainly due to the attempt to maximize crude oil exports in November, ahead of an increase in export duty which was supposed to start in January 2012. However, increased pipeline exports from Russia were partially offset by reduced exports from Azerbaijan. Exports of Azeri crude, using the Baku-Tbilisi-Ceyhan pipeline, dropped to 613 tb/d, down by 63 tb/d or 9.3%, in November, due to a planned production shutdown caused by field maintenance. Shipments through Russia’s Transneft pipeline system rose by 6.3% to 4.48 mb/d, the highest level since April 2007. In addition to the rush to avoid the export duty hike, as mentioned above, loadings were increased by continuing maintenance at Russian refineries. Exports of Kazakh crude to China through the Kenkiyak-Alashankou pipeline were raised in November m-o-m by 9.6%, or 16 tb/d, after the steep 30%, or 75 tb/d, decline in October.

Exports of CPC Blend through the Caspian Pipeline Consortium terminal at Novorossiysk were up m-o-m in November by 49 tb/d, or 7.8%, to 677 tb/d, reflecting higher shipments by Russia’s Rosneft and increased output in Kazakhstan. Black Sea pipeline exports were up m-o-m to 1.02 mb/d, by 81 tb/d, or 8.7%, compared with October. Shipments of Russian crude along the Druzhba pipeline increased m-o-m by 3.4%, or 41 tb/d, after a high level of supply during October. Exports of ESPO Blend from Russia’s far-eastern Kozmino terminal were down by 15 tb/d, or 5.3%, to 269 tb/d in November, while direct pipeline exports to China were stable at 313 tb/d. Exports from Sakhalin fell in November as a result of the drop in loadings of light sweet offshore grade Sokol, bringing overall exports from Russia’s far east to 274 tb/d, a decline of 7.4%, or 22 tb/d, compared with the month before.

Crude exports from Varandey terminal in northern Russia dropped sharply in November to 53 tb/d from 138 tb/d. The high level in October was due to the loading of accumulated oil storage at the port. The FSU’s product exports were broadly stable in November, with only a marginal decline of 1.5% to 2.42 mb/d, compared with October. It was mainly the conclusion of routine seasonal maintenance in Russian refineries that limited exports of most products. In particular, supplies of fuel oil rose slightly, by 3.4% or 43 tb/d, although this was countered by a decrease in gasoil of 0.6%, or 4 tb/d, after the Energy Ministry ordered oil companies to minimize exports of 10ppm sulphur gasoil in November to ensure sufficient domestic supply, following the ban on sales of gasoil with sulphur content exceeding 500ppm.

Jet exports rose sharply, by 3 tb/d, to 4.0 tb/d in November, compared with 1 tb/d in October. The low figure in October followed an acute shortage of jet fuel at Russian airports in September and also reflected reduced output of the product by Russian refineries. Gasoline and naphtha exports declined by around 41.4%, or 58 tb/d, to 82 tb/d and by 13.3%, or 30 tb/d, to 196 tb/d respectively in November m-o-m.