Russian oil exports drop to lowest in 7 months amid OPEC cuts and sanctions

BUSINESS INSIDER:  Russian oil exports have dropped to the lowest levels since December.

Bloomberg reported on Tuesday that exports from Primorsk and Ust-Luga, two of the country's main ports, are down 41% in the last month and are on track to keep falling.

The decline comes as Russia moves to comply with cuts agreed to by the OPEC+ oil cartel. The country plans to cut production further in the coming months to make up for producing beyond its OPEC+ quota, sources told Bloomberg.

The Kremlin has generally complied with OPEC's guidance, and during a series of cuts in March, President Vladimir Putin backed the OPEC+'s efforts to maintain oil prices but voiced worries over losing market share to the US.

So far this year, Russian crude exports have fallen about 30,000 barrels a day from last year's average, and are down 620,000 barrels a day since peaking in April.

The drop in exports of Russian crude oil also comes amid recent sanctions from Ukraine against Russian oil supplier Lukoil, which has diverted some oil flows to European countries like Hungary and Slovakia. Pipes to these countries would need to pass through Ukraine, and exports could rise again as the company diverts flows.

Meanwhile, the UK recently sanctioned tankers that move oil from Russia, including some that are part of the country's "shadow fleet." Over 60 tankers that carry Russian crude are now sanctioned.

Those sanctions are driving refiners in some countries, like those in India, to refuse deliveries of Russian oil.

Sanctions on Russian energy are part of a larger effort to crimp the revenue needed to keep funding the war in Ukraine, and have escalated since the conflict began in 2022.

Russia contributed to about 12% of global crude oil production in 2023, making it the third biggest crude producer in the world, according to Statista.