Higher Russian Refinery Maintenance Sending Barrels for Export

Russian domestic crude processing has reduced in May because of higher refinery maintenance levels.

• Russian refineries cut their average daily throughput to 5.34 million barrels from May 1-17, according to Bloomberg sources. It marks a decline of around 372,000 barrels a day from February levels, Bloomberg calculations show.
• The lack of domestic demand appears to be pushing higher crude volumes towards seaborne exports, which were about 268,000 barrels a day higher in May than in February.
• If May pipeline deliveries remained flat, the balance between exports to key foreign clients and domestic processing implies a net output decline of 165,000 barrels a day from February according to Bloomberg calculations.
• The calculations don’t take into account Russian oil deliveries to China via Kazakhstan under long-term contracts, as well as pipeline and railway supplies to neighboring countries.
• It also doesn’t take into account the possibility of high storage levels at oil fields, reservoirs, refineries and along the pipeline network.
• Regardless of those factors, the markets appears to be unconvinced about Russia’s commitments to 500,000 bpd cuts which has weighed on crude markets of late.

source: Bloomberg