MOSCOW (MRC) -- Russia’s crude exports on tankers are poised to fall to the lowest in at least six years as a government push to improve and expand domestic refineries means more oil is exported as fuels like diesel, reported Hydrocarbonprocessing.
Seaborne crude shipments from the world’s biggest energy exporter via the state-run pipeline system in August will fall 9.2% from this month to 2.215 million bpd, according to loading programs obtained by Bloomberg News. That’s the lowest since Bloomberg began tracking the data in 2008.
Russia’s two biggest crude terminals, Primorsk and Novorossiysk, will both export the least on record.
Russian oil companies are refining more crude domestically after President Vladimir Putin pushed them to spend billions of dollars modernizing plants. Output of diesel and fuel oil are the highest since at least 2009, Energy Ministry data show.
This puts pressure on European refiners who are already receiving less Russian crude as flows are diverted to China, which has been less critical of the Kremlin’s role in Ukraine, according to KBC Energy Economics.
"This trend of falling crude exports means we’re finally seeing results from the refinery modernization push," said Alexander Nazarov, an oil analyst at OAO Gazprombank in Moscow. "Refining is picking up and crude output has peaked."
Russia produced 10.55 million bbl of crude in June, up 0.1% from a month earlier in the first increase since January, according to the Energy Ministry’s CDU-TEK unit. The country’s refineries operated at the highest rate in two years on June 26, with offline daily processing capacity falling to 26,000 metric tons, before rising to 48,500 tons on July 23, according to CDU-TEK.
As MRC wrote previously, Russia will give all the necessary support to Shell in the Anglo-Dutch supermajor’s projects in the country, said President Vladimir Putin in April 2014. Putin, under pressure from international powers over continued destabilisation in Ukraine, met with Shell’s chief executive Ben van Beurden in Moscow in late April. "I am very pleased that your company plans to expand its area of activities in Russia," Russian news agency Itar-Tass quoted the president as saying to van Beurden. Shell has a large presence in oil and gas-rich Russia, including at the Sakhalin-2 project off the country’s far eastern region.
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