Oil: Warning of cuts in Russian Oil production - Commerzbank

The Russian pipeline monopoly has warned that Russian Oil production might have to be reduced due to Ukrainian drone attacks. This was reported by three industry sources. In addition to several refineries, Russia's largest Oil port on the Baltic Sea had recently been targeted in an attack. As long as only the refineries were affected by the attacks, the unprocessed Oil could still be exported, Commerzbank's commodity analyst Carsten Fritsch notes.

Russian Oil exports down

"This is probably one of the reasons why, according to Bloomberg data, Russian seaborne Oil exports rose to a good 4.1 million barrels per day in the week ending September 7, the highest level since April 2023, with this figure being further revised upwards. However, the following week saw a sharp decline of 933,000 barrels per day, which was mainly the result of lower shipments from Russian Baltic Sea ports and is likely to have been a consequence of the drone attack on the Baltic Sea port of Primorsk."

"However, there are apparently plans to handle Oil exports via other ports. According to two sources familiar with the matter told Reuters, more crude Oil than previously planned is to be shipped from the ports of Ust-Luga on the Baltic Sea and Novorossiysk on the Black Sea in September."

"It is also noteworthy that Russian oil exports to China and India declined for the second week in a row. The threatened punitive tariffs against buyers of Russian oil, or in the case of India, those already imposed, are obviously having an effect. If Russia is no longer able to sell its oil to China or India on the same scale as before, the only option left would ultimately be to reduce oil production."