October 2024 — Monthly analysis of Russian fossil fuel exports and sanctions

By Vaibhav Raghunandan, Europe-Russia Analyst and Research Writer, and Luke Wickenden, Energy Analyst

While Russian revenues continued their slide, revenues from seaborne crude oil soared for the first time in four months

Key findings

• Russia’s monthly fossil fuel export revenues dropped 4% to EUR 620 mn per day in October. 
• In October, Russia’s monthly export revenues from seaborne crude oil saw a 10% rise, the first in four months, to EUR 210 mn per day. 
• France was the largest importer of Russian fossil fuels within the EU in October, importing Russian LNG worth EUR 233 mn.
• In October, 399 vessels exported Russian crude oil and oil products, of which 222 were ‘shadow’ tankers. 30% of  these ‘shadow’ vessels were at least 20 years old.  
• From the period of the introduction of the EU sanctions in December 2022 to the end of October 2024, thorough enforcement of the price cap would have cut Russia’s export revenues by 8% (EUR 23.98 bn). In October alone, full enforcement of the price cap would have cut revenues by 8% (approximately EUR 0.8 bn).
• A lower price cap of USD 30 per barrel (still well above Russia’s production cost, which averages USD 15 per barrel) would have slashed Russia’s oil export revenue by 25% (EUR 71 bn) from the start of the sanctions until the end of October 2024. A USD 30 per barrel price cap would have slashed Russian revenues by 22% (EUR 2.67 bn) in October alone.

Trends in total export revenue

• In October, Russia’s monthly fossil fuel export revenues dropped 4% to EUR 620 mn per day. 
• Revenues from seaborne crude oil (EUR 210 mn per day) saw a 10% month-on-month rise — the first in four months. There was a 6% month-on-month rise in the volume of exports in October.  
• Revenues from crude oil via pipeline (EUR 71 mn per day) dropped by 5% in October.
• Russian revenues from seaborne oil product exports saw a sharp 14% month-on-month decline, to EUR 176 mn per day in October. 
• Russia’s LNG export revenues increased by 7% month-on-month to EUR 46 mn per day. 
• At the same time, Russian revenues from pipeline gas saw a 10% month-on-month decline, to EUR 64 mn per day. 
• Russian revenues from coal exports continued to slide in 2024, dropping by 13% month-on-month to EUR 50 mn per day as the Russian coal market faces a liquidity crisis and logistical difficulties such as rising costs of railway, freight, and port services, which have squeezed the margins for sellers in Western Russia.

Who is buying Russia’s fossil fuels?

• Coal: From 5 December 2022 until the end of October 2024, China purchased 46% of all Russia’s coal exports, followed by India (17%), Turkey (10%), South Korea (10%), and Taiwan (5%) to round off the top five buyers list. 
• Crude oil: China has bought 47% of Russia’s crude exports, followed by India (37%), the EU (6%), and Turkey (6%). 
• Oil products: Turkey, the largest buyer, has purchased 24% of Russia’s oil product exports, followed by China (12%), and Brazil (11%). 
• LNG: The EU was the largest buyer, purchasing 49% of Russia’s LNG exports, followed by China (22%), and Japan (18%). 
• Pipeline gas: The EU was the largest buyer, purchasing 40% of Russia’s pipeline gas, followed by China (29%), and Turkey (25%). 

Note: The EU’s imports of Russian oil products in October 2024 shown in the chart above are ship-to-ship transfers but not direct imports according to CREA’s analysis of Kpler data. The final destination of these oil products is currently unknown.

• China was the largest buyer of Russian fossil fuels in October, accounting for 45% (EUR 6.1 bn) of Russia’s monthly export earnings from the top five importers. Crude oil comprised 65% (EUR 3.9 bn) of China’s imports from Russia. 
• India was the second-largest buyer of Russian fossil fuels in October, contributing 19% (EUR 2.6 bn) to Russia’s monthly export earnings from its top five importers. An estimated 77% of India’s imports (valued at EUR 2 bn) comprised crude oil.
• Capitalising on the refining loophole, India has now become the biggest exporter of oil products to the EU. In the first three quarters of 2024, exports to the EU from the Jamnagar, Vadinar and new Mangalore refinery — which are increasingly reliant on Russian crude —  saw a 58% year-on-year rise further amplifying the fact that EU Member States continued imports are expanding the refining loophole, and Russian revenues from crude exports to third countries.  
• Turkey’s imports were the third highest, comprising 19% (EUR 2.5 bn) of Russia’s total export earnings from the top five importers. 56% of Turkey’s imports from Russia were oil products, and 23% comprised crude oil. 
• The EU was the fourth largest buyer of Russian fossil fuels in October, their imports accounting for 13% (EUR 1.8 bn) of the top five purchasers. Pipeline gas comprised the largest share of the EU’s purchases of Russia’s fossil fuels (47%), followed by LNG (32%).
• Brazil bought EUR 448 mn of Russian fossil fuels in October, which consisted almost entirely of oil products. Brazil’s imports of Russian oil products have risen 40% between January and October 2024 compared to the same period last year. 

• In October, the five largest Russian fossil fuel importing countries in the EU paid Russia a total of EUR 1 bn for their imports. The EU has granted an exemption for Russian crude oil imported through the southern branch of the Druzhba pipeline to Hungary, Slovakia, and the Czech Republic. Russian pipeline gas and liquified natural gas (LNG) also remain unsanctioned. 
• France was the largest importer of Russian fossil fuels within the EU, importing Russian LNG worth EUR 233 mn. France’s imports of Russian LNG remain significantly higher in 2024 when compared to the prior year. 
• Austria, the second-largest buyer within the EU, imported Russian pipeline gas valued at EUR 220 mn. 
• Slovakia, the third-largest buyer within the EU, imported pipeline oil worth EUR 115.5 mn and gas worth EUR 94 mn. 
• Hungary imported pipeline oil and gas worth EUR 70 mn and EUR 136 mn, respectively.
• Belgium was the fifth highest importer, buying EUR 172 mn of Russian LNG. 

How are oil prices changing?

• In October, the average Urals spot price saw a 4% reduction but remained above the price cap, trading at USD 69.48.
• The East Siberia Pacific Ocean (ESPO) prices and Sokol blends of Russian crude oil, primarily associated with sales to Asian markets, decreased by 1% and 2%, respectively.

• In October, there was a 77% month-on-month increase in the discount on Urals grade crude oil to an average of USD 5.14 per barrel compared to Brent crude oil. 
• The discount on the ESPO grade narrowed by 5% and was traded at an average discount of USD 4.58 per barrel while that on the Sokol blend widened by 8% to USD 6.77 per barrel.       
• Throughout this period, vessels owned or insured by the G7+ countries¹ continued to load Russian oil in all Russian port regions where average exported crude oil prices remained above the price cap level. These cases call for further investigation by enforcement agencies for breaches of sanctions.

Growth of ‘shadow’ tankers reduces G7+ shipping industry’s leverage over Russia

• In October, 34% of Russian seaborne crude oil and its products were transported by tankers subject to the oil price cap. The remainder was shipped by ‘shadow’ tankers and was not subject to compliance with the oil price cap policy. 
• 83% of the total volume of Russian seaborne crude oil was transported by ‘shadow’ tankers, while tankers owned or insured in countries implementing the price cap accounted for 17% of the total value of Russian crude exported in October.
• ‘Shadow’ tankers transporting oil products handled 40% of Russia’s total volume of products. The remaining volume was shipped by tankers subject to the price cap policy. 

‘Shadow’ tankers pose significant risks to ecology & impact of sanctions

• In October 2024, 399 vessels exported Russian crude oil and oil products, of which 222 were ‘shadow’ tankers. 30% of ‘shadow’ tankers were at least 20 years old.  
• Older ‘shadow’ tankers transporting Russian oil and petroleum products across EU Member States’ exclusive economic zones, territorial waters, or various maritime straits raise environmental and financial concerns due to their age, questionable maintenance records, and insurance coverage. Their insurance coverage potentially lacks sufficient protection & indemnity (P&I) insurance to cover the cost in the event of an oil spill or catastrophe. In the case of accidents, coastal countries may bear the financial brunt of the cleanup, not to mention the repercussions of damage to their marine ecology.
• The cost of clean up and compensation resulting from an oil spill from tankers with dubious insurance could amount to over EUR 1 bn for the coastal country’s taxpayers. 

• In October, EUR 278 mn of Russian oil underwent ship-to-ship (STS) transfers in EU waters, a sharp 34% reduction from the prior month.
• 74% of these transfers were facilitated by tankers covered by G7+ insurance. STS transfers of Russian oil severely undermine sanctions by allowing Russia to evade sanctions and price caps by splitting the cargo to multiple buyers and mixing lower-priced Russian oil with non-Russian oil. 
• ‘Shadow’ tankers, with an average age of 17, conducted environmentally dangerous ship-to-ship transfers totaling EUR 73.5 mn in EU waters. 

How can Ukraine’s allies tighten the screws?

Russia’s fossil fuel export revenues have fallen since the sanctions were implemented, subsequently constricting Putin’s ability to fund the war. However, much more should be done to limit Russia’s export earnings and constrict the funding of the Kremlin’s war chest. This includes lowering the oil price cap, increasing monitoring and enforcement of sanctions, and banning unsanctioned fossil fuels such as LNG and pipeline fuels that are legally allowed into the EU. 

Lowering the oil price cap

• A lower price cap of USD 30 per barrel (still well above Russia’s production cost, which averages USD 15 per barrel) would have slashed Russia’s oil export revenue by 25% (EUR 71 bn) from the start of the sanctions in December 2022 until the end of October 2024. A USD 30 per barrel price cap would have slashed Russian revenues by 22% (EUR 2.67 bn) in October alone.
• Lowering the price cap would be deflationary, reducing Russia’s oil export prices and inducing more production from Russia to make up for the otherwise drop in revenue.
• Since introducing sanctions until the end of October 2024, thorough enforcement of the price cap would have cut Russia’s export revenues by 8% (EUR 23.98 bn). In October 2024 alone, full enforcement of the price cap would have cut down  revenues by 8% (approximately EUR 0.8 bn).

Restrict the growth of ‘shadow’ tankers & plug the refining loophole

• Russia’s reliance on tankers owned or insured in G7+ countries has fallen due to the growth of ‘shadow’ tankers. This subsequently impacts the coalition’s leverage to lower the price cap and hit Russia’s oil export revenues. Sanctioning countries must prevent Russia’s growth in ‘shadow’ tankers that are immune to the oil price cap policy. 
• G7+ countries must also plug the widening refining loophole by banning the importation of oil products produced from Russian crude oil. This would enhance the impact of the sanctions by disincentivising third countries from importing large amounts of Russian crude and helping cut Russian export revenues. Banning the imports of oil products from refineries that process Russian crude oil would also lower the price of Russian oil as they would struggle to find buyers or expand their market.

Stronger enforcement & monitoring

• Enforcement agencies overseeing the sanctions must take proactive measures against violating entities, including insurers registered in price cap coalition countries, shippers, and vessel owners.
• Despite clear evidence of violations, agencies must do more to enforce penalties against shippers, insurers, or vessel owners, and this information must be shared widely in the public domain. Penalties against violating entities increase the perceived risk of being caught and serve as a deterrent.
• Penalties for violating the price cap must be significantly harsher. Current penalties include a 90-day ban on vessels from securing maritime services after violating the price cap, a mere slap on the wrist. If found guilty of violating sanctions, vessels should be fined and banned in perpetuity.
• Sanctions enforcement bodies must continue to sanction ‘shadow’ tankers as doing so hinders Russia’s ability to transport its oil above the price cap. CREA estimates that the Office of Foreign Assets Control (OFAC)’s initial sanctioning of ‘shadow’ tankers widened the discount that Russia offered buyers of its oil and cut Russia’s crude oil export revenues by 5% (EUR 512 mn per month).
• The lack of proper monitoring and enforcement and rising oil prices have increased Russia’s export revenues to fund its war against Ukraine.
• The G7+ countries should ban STS transfers of Russian oil in G7+ waters. STS transfers undertaken by old ‘shadow’ tankers with questionable maintenance records and insurance pose environmental and financial risks to coastal states and support Russia in logistically exporting high volumes of crude oil. Coastal states should require ‘shadow’ tankers transporting Russian oil through their territorial waters to provide documentation showing adequate maritime insurance. If ‘shadow’ tankers fail to do so, they should be added to the OFAC, UK, and European sanctions list. This policy could limit Russia’s ability to transport its oil on ‘shadow’ tankers, exempt from complying with the oil price cap policy.

Relevant reports:

• Shell companies, ghost ships and secret traders: How Russia circumvents Western oil sanctions
• EU Emissions Fall as Renewable Energy Surges
• Tapping the loophole: Czechia has spent five times more on Russian oil and gas than aid to Ukraine
• Dutch Parliament tables questions on refining loophole and Russian shadow fleet
• Ensuring an ecological disaster: ‘Shadow’ tanker spill could cost coastal states USD 1.6 bn

Note on methodology Update, 10 October 2023 – We now use Kpler to estimate seaborne exports from Russia and other countries. This change increases our tracker’s estimate of exports from Russia to the world by EUR 77.8 bn (+18% increase) and the exports to the EU by EUR 12.4 bn (+2.8% increase).We have also changed how we receive protection and indemnity (P&I) insurance information about ships to obtain data from known P&I providers directly and from Equasis. This ensures we have recorded the correct start date for a ship’s insurance.Find out more details on the changes in our methodology explained in our article about the migration from automatic identification system (AIS) data providers to the Kpler dataset.Data used for this monthly report is taken as a snapshot at the end of each month. Data on trades and shipments of oil are revised and verified by the data provider through the month. We subsequently update this verified data each month to ensure accuracy. This might mean that figures for the previous month change in our updated subsequent monthly reports. For consistency we do not amend the previous month’s report, and instead treat the latest one as the most accurate data for revenues and volumes.

1.  ‘G7+’ refers to the G7 countries, EU member states, Australia, Norway, and Switzerland that all implement the oil price cap policy.
   ↩︎