Russian crude oil exports in January felt the whole spectrum of market reaction following recent waves of US sanctions and Ukrainian drones. Shipments dropped immediately after Washington announced new restrictions on Jan. 10 but bounced back toward the end of the month when drone attacks seemingly damaged pipeline infrastructure leading to one of Russia’s key export outlets.

Multiple factors will continue to impact Russian oil exports, including the ability of exporters and importers to adapt to sanctions, along with the Opec-plus production curbs reconfirmed this week, the US trade and tariff war and the drone attacks against key energy infrastructure.

Mixed Dynamics

Despite demonstrating mixed dynamics during the month, Russian oil exports to non-former Soviet Union markets inched up in January to almost 4.3 million barrels per day from 4.2 million b/d in December 2024. The January exports were, however, well below the 4.58 million b/d shipped to global markets in January 2024, according to sources close to official data.

Numerous factors had an impact on Russian exports last month, none more so than the new US sanctions specifically targeting Russian oil. In the week starting Jan. 10 when the sanctions were unveiled, Russian exports dropped by nearly 26% from the previous week but recovered sharply by jumping almost 42% during Jan. 17-24, according to data from Russia’s Price Index Center.

Data from ship tracker Kpler and sources close to Russian official numbers show that Russian oil exports from the Pacific port of Kozmino suffered the most because of sanctions, which targeted over 180 vessels, mostly involved in the Russian oil trade. Shipments from Kozmino at the end of the East Siberia-Pacific Ocean pipeline averaged just 800,000 b/d last month — a level not seen since September 2023 — and well below an all-time high of 976,000 b/d in December 2024. Shipments are believed to be recovering as the dust of sanctions settles.

Freight rates for tankers shipping Russian barrels from key outlets, which jumped by 30%-75% in the first seven days after sanctions were announced, dropped slightly the next week by 4%-7%, according to Price Index Center. Freight rates at Kozmino, which soared by 240%, were still high and increased by another 14%.

High freight rates attract more shipowners willing to take the risks, experts say. According to market analysts, vessels that have long operated off the coast of Singapore, China and the Mideast Gulf are heading to Kozmino. Several Greek tankers, which recently worked in South America, the Gulf of Mexico and the Mediterranean, are heading to the Baltic Sea port of Primorsk.

Drone Outages

According to reports, which the Russian side denies, Ukrainian drone attacks damaged an oil pumping station along the trunk pipeline network, which pumps the crude both in the direction of Baltic Pipeline System-2 and the Druzhba pipeline. The 600,000 b/d BPS-2 pipeline ships crude oil to the Baltic Sea port of Ust-Luga.

Data from Kpler shows that there have been gaps in loadings from Ust-Luga since Jan. 29. However, such gaps are rather ordinary for the port, especially in the winter months. There were storm warnings in the port late in January and in the first days of February. Data shows that exports from Ust-Luga dropped by almost 42% in January compared to December, although sources in Russia insist this is a temporary trend. Kpler data shows a heavy loading plan for Ust-Luga this month.

Lower shipments from Ust-Luga last month were partially offset by higher exports from the port of Primorsk, also on the Baltic Sea. Exports from Primorsk jumped by nearly 30% on the month in January to nearly 1 million b/d. At the same time, shipments from Novorossiysk port on the Black Sea were slightly down, both because of lower shipments to India, which is still evaluating the implications of the latest sanctions, and weather conditions.

Market experts believe that Russian oil exports are stabilizing after the first shocks of sanctions, with exporters finding new vessels for their supplies. In the long run, most analysts believe that the market will adjust to the new restrictions and Russian supplies would not be hurt badly.

Much will also depend on the attacks against Russian refineries and energy infrastructure. Outages at refineries might free up more barrels for exports. At the same time, Moscow might urge oil firms to load their other facilities to ensure sufficient supplies on the domestic market.

The Opec-plus agreement will also be a factor to watch as the 22-member group, in which Russia is a major non-Opec player, confirmed this week that it aims to start gradually increasing output in April for the first time since October 2022.