STS transfers of Russian crude plummet - Vortexa
Russian exports of its Urals crude oil grade via ship-to-ship (STS) transfers have slowed sharply over the past few months, falling by 85% in August compared to a peak earlier this year.
GRAPH: Russian Urals transferred via STS offshore Ceuta, Kalamata, Atlantic Ocean and other STS locations, by STS transfer month vs Russian Urals exports. Vortexa
In August, only 4% of total Russian Urals exports involved STS transfers, which is a drastic contrast to the first quarter of this year, when a quarter of exports were transferred STS, according to Vortexa data.
Several factors have contributed to the slowdown in STS transfers of Russian crude oil, including Moscow's decision to cut oil exports since July in coordination with supply cuts from Saudi Arabia and the wider OPEC+ group. Saudi Arabia and Russia announced on Tuesday that they will extend their supply cuts to the end of this year.
Russia cut exports by an average of 400,000 b/d in July and August as compared to the first and second quarters.
STS activity involving Russian Urals crude surged at the start of this year, after the EU embargoed seaborne imports of Russian crude oil in December. The embargo also limited Russia's access to maritime services, which led to a surge in so-called "dark fleet" STS transfer activity aimed at obscuring the origin of Russian oil to transport it without attracting sanctions.
However, since the ban, China and India have become by far the two largest buyers of Russian Urals. This has over time reduced the need for middlemen to move Russian oil to the East, Vortexa analyst Armen Azizian says.
There were also more STS transfers in the first quarter because of high demand for ice-class vessels to act as shuttles between the Baltics and Mediterranean. This demand then dried up with warmer summer weather, leading to a slowdown in Russian STS transfers in recent months, according to Vortexa.
By Debarati Bhattacharjee
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