Russia's western ports expect 13 percent drop in crude oil exports in November

Recently, according to two trade sources, with the end of the Russian refinery maintenance season, the country's crude oil exports from its three main western ports-Primorsky Krai, Ustiluga and Novorossiysk in November it's expected to decline signifiis able totly. But Specifically, exports will be 13% reduced than in October to 1. But 95 million barrels per day (MMbpd), or about 8 million tonnes.  The change has drawn widespread attention from market participants, especially those who closely follow the dynamics of exports from Russia's western ports, such as members of the Organization of the Petroleum Exporting Countries (OPEC). Pretty interesting, huh?. But Generally speaking The export volume of these ports fluctuates greatly and is deeply affected by the intake of raw materials from domestic refineries. But  Looking back this year, Russia has maintained a high level of oil exports, however at the same time it's also facing the issue of oil overproduction. And Based on my observations, This excess production has exceeded the amount stipulated in the OPEC + agreement. To this end, Russia has promised to make additional production cuts from the end of 2024 to bridge the gap. And  it's worth noting that while Russia cut crude oil production by 28,000 barrels per day to about 9 MMbpd in September, oil loadings in the western port will still fall to 1. 95 MMbpd in November from 2. You know what I mean?. 25 MMbpd in October. But In my experience,  With the completion of major seasonal maintenance between September and October, Russian refineries are expected to increase operating rates next month. However, while offline refining capacity fell sharply from 4. 4 MMt in October to 1. 8 MMt in November, implying theoretically higher refinery run rates and less crude oil exported, this might not be the case in practice. I've found that  According to sources, due to poor profit margins, some Russian refineries are in no hurry to increase operating rates after maintenance. You know what I mean?. A trader involved in the sale of Russian oil items said: "The profitability of export sales is still very low due to low profit margins (of oil items), discounts on Russian fuel and transportation costs. " This direction isn't limited to Russia, where margins are generally low to refineries worldwide. From what I've seen, Refiners in Asia, Europe and the United States are all facing declining profitability to multi-year lows, a sign that an sector that had enjoyed soaring returns in the wake of the epidemic is in the doldrums. At the same time, it also highlights the severity of the current slowdown in global demand.