Russian Western Crude Shipments to Dip in September as Black Sea Risks Persist

Russia's crude oil exports from its western ports are expected to ease to roughly 2.1 million barrels per day (bpd) in September, down from about 2.2 million bpd in August, according to industry sources. The decline is attributed to persistent disruptions at the Black Sea port of Novorossiysk, which have been compounded by a series of Ukrainian drone attacks.

The attacks, which intensified in August, have not only damaged infrastructure but also created a shortage of available tankers and led to significant loading delays. This has made shipowners increasingly reluctant to send vessels to the port, given the heightened security risks. The cost of chartering a Suezmax tanker from Novorossiysk to India has consequently surged to around $20 million, the highest level in several years, up from roughly $13 million a month earlier.

Data from traders indicates that exports and transit volumes from Novorossiysk more than halved in August, dropping from around 800,000 bpd in July to less than 350,000 bpd. The September schedule for the port is largely composed of cargoes carried over from August, making it difficult to assess the port's underlying export outlook for the month.

Planned loadings from Novorossiysk are expected to remain broadly unchanged from August levels. A key variable is the volume of Kazakh crude transit shipments that Russia is rerouting from the Baltic port of Ust-Luga to Novorossiysk to free up capacity for its own exports. However, the scope for increasing shipments from Baltic ports is limited by terminal capacity constraints. Ust-Luga itself came under a drone attack on Tuesday, though no damage to oil infrastructure was reported.