According to the International Energy Agency (IEA) in its monthly oil market report, Russia earned $18.8 billion from oil exports last month, marking September as the most profitable month since July 2022. The agency stated that the country’s oil export revenues increased by $1.8 billion in just one month. The rise was mainly attributed to growth in total export volumes and higher average prices for Russian crude and oil products, with gains from crude exports surpassing profits from the shipment of petroleum products.
The IEA’s estimates revealed that Russia’s total oil exports grew by an average of 460,000 barrels per day (bpd) month-on-month, with crude accounting for 250,000 bpd of the increase. In September, Russia’s total oil exports reached 7.6 million bpd. Additionally, the average price for Russian crude in the market rose by approximately $8 per barrel compared to August.
China and India remained the largest buyers of Russian oil last month, a title they have held since earlier this year when Moscow redirected oil shipments to Asian markets due to Western sanctions and a price limit on Russian crude. This move allowed Russia to maintain its oil exports and secure a stable customer base despite geopolitical challenges.
The surprising aspect of the IEA’s estimates is that Russia had previously expressed its intention to reduce oil output and deliveries. In March, the country voluntarily decreased its output by 500,000 bpd, a cut that was expected to last until the end of 2024. In August, another 500,000 bpd reduction in crude exports was introduced, which was then adjusted to 300,000 bpd. Russia has recently reaffirmed its commitment to these production cuts.
Similarly, Saudi Arabia, Russia’s OPEC+ ally and the world’s largest oil exporter, announced in October that it would continue to reduce its crude output by 1 million bpd until January 2024. This coordinated effort between the two oil giants resulted in a surge in global benchmark Brent oil futures prices, reaching around $95 per barrel in September compared to the year’s lows of approximately $72 in March.
The increase in prices was further influenced by the escalation of conflicts between Hamas, a Palestinian militant group controlling much of Gaza, and the Israeli Defense Forces. These hostilities raised concerns about the potential exacerbation of the existing oil supply deficit. However, the IEA’s report stated that there has been no direct impact on supplies thus far.
In conclusion, Russia’s oil export revenues experienced a significant boost in September, reaching the highest level since July 2022. The surge in profits was primarily driven by increased export volumes and higher average prices for Russian crude and oil products. Despite the country’s intention to reduce output, Russia has managed to maintain its position as a major oil exporter, with China and India being its largest buyers. The coordination between Russia and Saudi Arabia in production cuts has contributed to the rise in global oil prices. However, concerns about potential supply deficits have emerged due to geopolitical conflicts, although their impact on supplies remains limited for now.