Russian Oil Exports Rebound

Russian oil exports are rebounding after a period of compliance with an agreement with Saudi Arabia to limit production. In the week ending October 15, Russia's seaborne crude exports increased, pushing the four-week average to its highest level in over three months. About 3.51 million barrels of crude were shipped from Russian ports during that week, with a rise of approximately 285,000 barrels per day compared to the previous week. This increase was mainly due to a surge in Black Sea exports, reaching a six-week high, and a recovery in shipments from the Arctic port of Murmansk following a slump in the previous week. Russia has maintained export restrictions, and while there has been a slight increase in exports relative to those restrictions, compliance has been reasonably strong when compared to past performance against OPEC+ targets. These rising export volumes have boosted Russia's weekly oil export duty revenues, setting a new high for the period since mid-January. However, there are concerns about the effectiveness of the price cap imposed on Russian exports by the Group of Seven nations and the European Union. In response, the US Treasury has imposed sanctions on tankers accused of carrying cargoes sold at prices above the $60-a-barrel ceiling, marking the first attempt to enforce the cap since its inception. Russia's oil refineries are also increasing daily processing rates this month, though ongoing maintenance and temporary diesel export restrictions have kept rates slightly below the average for most of September.