As per the latest updates from Energy Intel, “Russia is shipping increasing volumes of crude oil and refined products to the US to meet that nation’s rising demand.”
The news also states that Russia is now, “the second-largest foreign supplier of fuel to the US after Canada, despite being subject to a range of sanctions imposed by Washington.”
The article also mentions the record oil imports from Russia, by the US, as 844,000 barrels per day in May.
Key quotes
Russian fuel exports to the US are more than double the volumes sailed over by Saudi Arabia, which is focussing on the more lucrative Asian market. Russia kept the volumes steady to China.
US imports of Russian crude were 185,000 b/d in the first half of the year, but 277,000 b/d in May, even more than the 255,000 b/d the Saudis landed.
The shift to the US might not be structural when Europe picks up refinery runs once the pandemic is under control.
Russian exports through the Druzhba pipeline have been 200,000 b/d lower but not all volumes might return as countries like Poland try to diversify away from Russia. Russian oil firms mostly cut output from less-efficient brownfields that feed the Druzhba pipeline.
Also, Moscow has asked domestic refiners to provide sufficient volumes of products to the home market.
Crude throughput in Russia was 5.7 million b/d in the first half of 2021, versus 5.4 million b/d in the second half of 2020. Some of the additional products ended up in the US.
Market reaction
The news signals increasing oil demand from the US and should have favored the energy prices. However, WTI remains mostly unchanged above $69.00 after the news release.
Read: WTI Price Analysis: Mildly offered around $69.00 but bulls remain hopeful
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