Ukrainian drone strikes on Baltic ports wipe US$1 billion off Russia's oil revenues

Ukrainian drone strikes on key Russian ports on the Baltic Sea have pushed Russian oil exports down to their lowest level since the full-scale invasion of Ukraine and caused losses of more than US$1 billion.

Source: Bloomberg

Details: Weekly oil flows from Russia fell by 1.75 million barrels a day to 2.32 million barrels a day last week (23-29 March).

The drop was caused by repeated Ukrainian drone strikes on the Russian oil export terminals at Primorsk and Ust-Luga, which halted shipments for most of the week. Combined exports from the two ports were the lowest since the start of 2022.

This also cut oil flows through the ports to about a third of the previous week's level and reduced Moscow's oil revenues by more than US$1 billion.

The impact on four-week average shipments was less pronounced. Over the 28 days to 29 March, supplies fell to 3.31 million barrels a day, down by 280,000 barrels a day, the lowest level in two months.

Vessel-tracking data and port-agent reports show that 22 tankers loaded 16.23 million barrels of Russian oil in the week to 29 March – a sharp drop from the 28.5 million barrels loaded by 37 vessels the previous week.

Repeat strikes on the oil export terminals at Primorsk and Ust-Luga caused tank fires and stopped loading operations for most of last week.

The fall in oil shipment volumes coincided with a surge in deliveries from tankers that had previously been stuck at sea with Russian cargo on board.

Oil flows to India rose to almost 1.7 million barrels a day in March, up from about 1.1 million barrels a day in February, after the US issued licences for purchases of Russian oil loaded onto tankers before 12 March.

For reference: Ust-Luga is one of Russia's biggest ports on the Baltic Sea and a key hub for exports of Russian oil products. It is located about 1,000 km from the Ukrainian border.

The site is strategically important for financing Russia's war machine because it generates substantial foreign currency revenues for the Russian budget.

Background:

• Russia's Leningrad Oblast came under a large-scale drone attack on the night of 24-25 March, which caused a fire at the port of Ust-Luga.
• Drones attacked Russia's Leningrad Oblast again on the night of 30-31 March, with damage reported at the port of Ust-Luga.
• Coordinated strikes by Ukraine's defence forces on infrastructure facilities in Russia's Leningrad Oblast have blocked a significant portion of Russia's oil exports via the Baltic Sea.

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