Oil prices deal a double blow to Russia

The average volume of oil deliveries over four weeks fell in the period up to December 14, caused by the largest weekly decline in deliveries since the invasion of Ukraine in 2022, according to Bloomberg.

Unloading cargo has proved even more challenging, as the cost of transporting oil by sea has risen 40% since the end of August, and at least 20 shipments loaded at the country's western ports in September and October have still not been delivered.

Numerous tankers have disappeared from tracking systems in the Riau Archipelago, northeast of Singapore, a favorite spot for transshipping sanctioned Iranian barrels between ships, which is becoming increasingly popular among Moscow oil carriers. Tracking data shows that at least six transshipments of Russian cargo have taken place there since November, and six more fully loaded tankers have disappeared from the area this month.

More than 170 million barrels of Russian oil are stored in tankers, 40% more than at the end of August. In the four weeks leading up to December 14, Moscow shipped 3.61 million barrels per day. This is 70,000 less than in the period leading up to December 7, due to a decrease in weekly shipments of 1.24 million barrels per day.

The eleventh consecutive drop in oil prices has exacerbated Moscow's difficulties. The price of Urals crude has fallen by about $20 per barrel, or more than a third, since its recent peak in mid-July, falling to its lowest level since the start of the war. ESPO crude, loaded in the Pacific region, fared slightly better, losing about 22% of its value over the same period. But even here, sanctions are weighing on demand, allowing at least one Chinese buyer to purchase a shipment at what traders say is the biggest discount this year.

The drop in Moscow's revenues coincides with increased diplomatic pressure from the US on Ukraine and its European allies to reach a peace agreement, even as the Kremlin continues to bomb the neighboring country's gas and energy infrastructure. Kyiv continues to strike Russia's oil assets, extending its attacks to production platforms in the Caspian Sea and hitting more and more tankers carrying the country's oil.

Photo: Channel 24.