Russian seaborne exports of refined petroleum products dropped to their lowest level in at least a decade in July, even as crude oil exports remained elevated despite dipping from a June peak, according to cargo-tracking data. The decline comes as Ukraine continues its campaign of strikes against Russian refining infrastructure, part of a broader strategy to degrade Moscow's ability to sustain fuel supplies for its military operations and earn export revenue.

Preliminary data from S&P Global Commodities at Sea (CAS), published August 4, showed that Russia's refined product exports fell to 1.18 million barrels per day (b/d) in July, down from 1.51 million b/d in June — the lowest figure since records began in 2016. The data remains subject to revision. Russia has historically ranked among the world's largest exporters of refined products, particularly diesel and naphtha, making this contraction significant for global supply balances.

Ukrainian drone strikes have inflicted substantial damage on Russian refining operations, disabling more than a third of the country's refining capacity and pushing crude throughput below 4 million b/d, the lowest level in over two decades, according to CAS analysts.

The resulting domestic fuel shortages led the Russian government to impose a diesel export ban covering July 8–31, subsequently extended through January 2027. However, an exemption will take effect in September, allowing refiners to resume gasoil exports.

"In a notable reversal of its traditional role as a major exporter, Russia has begun importing refined products from neighboring Kazakhstan and Belarus, including seaborne procurement of gasoline from India, to address its domestic shortfall," CAS analysts noted.

Russia's gasoil and diesel loadings for international markets dropped to 157,000 b/d in July, down from 471,000 b/d in June, according to CAS data. Naphtha exports stood at 290,000 b/d, a 9% decline from June.

On August 3, Platts — part of S&P Global Energy — launched several new freight rate assessments for so-called shadow fleet routes. Platts estimates that tankers associated with shadow fleet activity now account for approximately 22% of the global fleet, with the majority linked to crude and refined product flows originating from Russia. The shadow fleet expanded substantially after the G7 imposed a $60-per-barrel price cap on Russian crude in December 2022, followed by a comparable mechanism for refined products in February 2023, both of which require Western maritime service providers to verify price compliance.

As of August 4, Platts assessed the time-charter-equivalent (TCE) earnings for transporting refined products on a Medium Range (MR) tanker burning very low sulfur fuel oil (VLSFO) from the Baltic port of Primorsk to Mersin at $16,261/day. The TCE for carrying clean products on a non-scrubber-fitted, non-eco MR burning VLSFO from Ust-Luga to Santos was assessed at $18,931/day.

Crude Shipments Remain Elevated

Russia's crude exports stayed high in July despite easing from their June peak, as reduced domestic refinery runs freed up more supply for overseas buyers. Preliminary CAS data showed seaborne crude exports at 4.321 million b/d in July — down 7% month over month but up 26% year over year, marking the second-highest monthly reading in 2026.

Preliminary data indicated Russia exported 994,000 b/d to India in July, representing a 58% month-over-month decline and a 39% year-over-year decrease. By contrast, exports to China rose to 1.017 million b/d, up 18% month over month and 12% year over year. Both India and China emerged as primary buyers of Russian crude following Western sanctions, frequently securing barrels at discounted prices relative to international benchmarks.

Exports to Singapore surged 112% month over month to 456,000 b/d in July. These figures include ship-to-ship transfers in Southeast Asian waters, which have increased amid renewed Western sanctions pressure.

The European Commission formally adopted its latest sanctions package against Russia on June 23, introducing measures to restrict offshore tanker transfers of Russian oil and banning Russian crude flows through the northern branch of the Druzhba pipeline, a key historic conduit for delivering Russian crude to refineries in Central Europe. Separately, the U.S. waiver for oil on water — extended multiple times by the U.S. Treasury Department since the outbreak of the Middle East conflict — expired on June 17.

On August 4, Platts assessed the TCE for shipping crude from Russia's Baltic Sea port of Ust-Luga to Sikka on a non-scrubber-fitted, non-eco Aframax burning VLSFO at $86,489/day. The TCE for transporting crude on a non-scrubber-fitted, non-eco Suezmax burning VLSFO from Novorossiysk to Vadinar was assessed at $245,804/day.

Source: Platts