Oil exports from the Russian Federation reached a record since the pandemic in March, but revenues fell by 40% for the year

Oil exports from the Russian Federation reached a record since the pandemic in March, but revenues fell by 40% for the year


Oil exports from the Russian Federation in March were the highest since the pandemic, but their revenues almost halved compared to the previous year, which is a consequence of the embargo and price ceiling.

This was announced by the International Energy Agency (IEA), reports Bloomberg.

Daily Russian oil exports averaged 8.1 million barrels per day in March, the highest since April 2020. The agency explains that the reason lies in significant discounts on oil from the Russian Federation, which attract traders who are ready to take the risk of working with Russia.

Export revenue rose slightly from February lows to $12.7 billion, but was still 43% lower than a year earlier.

However, the IEA says, the situation may become more complicated in the coming months due to the reduction in production by OPEC+ will lead to an increase in oil prices. In April, the price of the benchmark Russian oil Urals was within $5 below the ceiling of $60/barrel, while the weighted average export price of all Russian oil exceeded this mark.

Sanctions from the G7 countries forced Russia to look for alternative markets in the Middle East and Latin America, as well as to expand supplies to Asia. However, the price ceiling introduced by the G7 gave these new customers leverage to negotiate discounts. The restrictions mean that buyers from third countries can access Western services, such as insurance and shipping, only if the limits are respected.

The weighted average export price for Russian oil was $50.67/barrel, the IEA calculated, compared to the upper limit of $60/barrel. It is also nearly $2/bbl lower than the average price for February, the agency said.

In addition, according to IEA estimates, oil production in Russia last month amounted to 9.58 million barrels per day, which is only 290 thousand barrels per day less than in February. Earlier, in response to the introduction of the price ceiling, the Russian Federation promised to reduce oil production by 500,000 barrels per day compared to the February level.

The country did not reach this target, as “it seems that it is directing its barrels to new sales markets, despite EU sanctions,” the IEA says.

We remind you:

Russia declared about abbreviation oil production of 500 thousand barrels per day (b/d) in response to the introduction of a price ceiling on it by the G7 countries, the markets reacted by increasing prices.

According to the results of the first quarter of 2023, Russia’s oil and gas revenues fell down by 45%, in particular as a result of the entry into force of the G7 sanctions on oil and oil products from the aggressor state.



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