Russia's oil exports hit highest since Ukraine war, revenues fall

Russia's crude oil exports have reached their highest level since the start of the war in Ukraine. However, a decline in global prices has pulled export revenues down.

Russia's crude oil exports have reached their highest level since the start of the war in Ukraine. An increase in seaborne shipments and the disabling of some domestic refinery capacity due to Ukrainian drone attacks pushed the export volume to record levels.

According to tanker-tracking data compiled by Bloomberg, Russia's four-week average crude oil exports rose to 4.13 million barrels per day in the period ending June 28. This was the highest level seen since 2022. Weekly shipments hit an all-time record of 4.63 million barrels per day.

The total volume of Russian oil transported by sea rose to approximately 133 million barrels, marking a 34 percent increase compared to mid-April. Shipments have begun to pile up off the coast of Egypt and east of Singapore, indicating difficulties in placing some volumes onto the market.

Revenues decline

Despite the record increase in export volume, Russia did not achieve a similar financial gain. The weekly revenue from oil exports over a four-week average fell to around $1.9 billion, the lowest level since March. The decline was driven by a fall in global prices and a corresponding drop in the price of Urals crude.

The average price of Urals oil loaded from Baltic ports fell to $62.66 per barrel, while Urals shipped from the Black Sea dropped to $62.18 per barrel. Russia's ESPO crude traded at $74.27 per barrel.

Market observers assess that Moscow may have to offer larger discounts on its crude oil if demand remains weak, especially from Russia's biggest buyers, China and India, or if waivers on Iranian oil are extended after mid-August.

Refinery attacks and domestic pressure

The increase in exports coincided with a period of continued Ukrainian drone attacks on Russian oil refineries. The attacks led to crude oil that could not be processed domestically being redirected for export. Recent attacks targeted facilities in Ufa, Yaroslavl, and Slavyansk-na-Kuban, as well as the Moscow Refinery. Estimates suggest the Moscow Refinery could remain offline until the end of the year.

Russian President Vladimir Putin said the country is experiencing problems with fuel supply, with shortages and queues at gas stations in some regions. Putin stated that the government has established a task force working around the clock to resolve the crisis and ensure supply. He said that gasoline reserves currently stand at about 1.7 million tons and that production is expected to increase in July. He added that a full ban on diesel exports is being considered to stabilize the domestic market. Deputy Prime Minister Alexander Novak had previously stated that such a step was not necessary for now.

Putin also emphasized that fuel supply to the agricultural sector would be prioritized during the harvest season, describing this as essential for the continuity of agricultural production.

Shift to Asian markets

Data showed that exports to Asian markets – including shipments with no destination specified – rose to 3.98 million barrels per day in the four-week period ending June 28. This was the highest level since 2022. Shipments to China averaged about 1.08 million barrels per day, while the amount declared for India fell to 740,000 barrels per day. More than 2.1 million barrels per day were carried on tankers whose final destination has not yet been declared. This practice, common in Russian oil trade since the start of Western sanctions, reflects a strategy of keeping the direction of shipments secret.

Economic impact

The developments in the energy sector coincide with a slowdown in the Russian economy. Russian Central Bank Deputy Chairman Aleksey Zabotkin said the fuel sector operating below full capacity for several months could negatively affect economic performance this year.

The Russian Central Bank had set its gross domestic product growth forecast for 2026 at between 0.5 and 1.5 percent. Concerns are being raised that ongoing attacks on energy infrastructure will increase pressure on economic activity.