MOSCOW (Reuters) - Russia plans to halve oil exports from its Baltic and Black Sea ports in May according to the first loading schedule for crude shipments since it agreed this month along with other major oil producers to cut output.
According to the schedule seen by Reuters, Russian exports next month from its two Baltic ports and Novorossiisk in the Black Sea will total 1.3 million barrels per day (bpd), down from 2.2 million bpd in April.
The OPEC+ group led by Saudi Arabia within OPEC and Russia for non-OPEC states has agreed to cut oil production by 9.7 million bpd from May 1, with Moscow reducing its output to 8.5 million bpd from a baseline of 11 million.
Russian oil companies are now preparing for their biggest output cuts ever, which could lead to some oilfields shutting down permanently.
Most of the crude set for export via Russia’s Western sea routes in May is its flagship Urals blend, with only 160,000 tonnes of Siberian Light due to be shipped as well, according to the preliminary loading schedule.
Urals exports are set to fall to their lowest since at least the early 2000s, Refinitiv Eikon data shows. The drastic cut has already lifted the price of the Russian grade to five-month highs, according to Reuters monitoring.
“We can’t judge if Russia is really cutting output in line with the agreed levels, but even if the oil export plan is just for show, it does really well for Russian oil marketing,” a European trader who regularly buys Urals crude said.
Earlier this week, Brent crude futures touched 20-year lows, meaning Urals exports were losing money taking into account their discount to the European benchmark and Russian export duties.
On Thursday, Urals cargoes for loading in May were firmer with a discount of just $1 per barrel to Brent in northwest Europe and the Mediterranean, according to Reuters data. Cargoes for April had a discount of $4.60.
Calculated on a daily basis to account for the different number of days in May and April, Russia will be cutting oil exports from its Western ports by 43% next month, Reuters calculations show.
Urals exports from Russia’s Primorsk and Ust-Luga Baltic ports are set to fall to 4.3 million tonnes from 6.7 million in April while Urals and Siberian Light exports from Novorossiisk are set to halve to 1.22 million, according to the plans.
There will only be two 80,000-tonne loadings of sweet Siberian Light crude compared with six to seven cargoes normally. Siberian Light cargoes for April have been trading at record discounts to Brent due to weak demand.
Editing by David Evans, Katya Golubkova and David Clarke
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