Can Russia Reduce Oil Exports?

Russia exported more crude oil than planned in February due to damage to refineries caused by drone attacks and technical failures, a trend that could impact Moscow's commitment to reduce crude sales under the agreement with the Organization of the Petroleum Exporting Countries (OPEC) and its allies. According to the agreement with the OPEC+ group, which includes major oil producers, Russia set its crude oil production at 9.5 million barrels per day and approved a voluntary reduction of crude oil and fuel exports by 300,000 barrels per day and 200,000 barrels per day respectively, compared to the averages of May and June. Analysts say it will be difficult for Moscow to meet its commitments given the accumulation of crude oil and its limited refining capacity. There are already signs of increased crude oil supplies from Russia. Oil shipments from the ports of Primorsk, Ust-Luga, and Novorossiysk are expected to increase by about 0.7 million metric tons compared to previous estimates of 8.2 million tons (2.1 million barrels per day). Ronald Smith from Moscow-based BCS Global Markets said, "Crude exports are expected to rise as gasoline and diesel exports contract." Sources mentioned that the Russian Novorossiysk refinery on the Black Sea will not resume operations until March, due to damage from a Ukrainian drone attack. Traders noted that any further incidents affecting Russia's energy infrastructure could also lead to additional increases in oil exports in February. Damages are expected to reduce naphtha exports by a third or an estimated 127,500 to 136,000 barrels per day, according to traders and ship tracking data from the London stock exchanges, and jet fuel exports may decline by about 20,000 barrels per day.