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

By Petras Katinas, Energy Analyst; and Vaibhav Raghunandan, Europe-Russia Analyst and Research Writer

Russia’s fossil fuel export earnings continue to slide for a fourth consecutive month, despite rise in revenues from pipeline gas

Key findings

  • In July, Russia’s monthly fossil fuel export revenues dropped by 3% to EUR 656 mn per day, their lowest levels in 2024.
  • The five largest Russian fossil fuel importing countries in the EU paid Russia EUR 1.2 bn this month. Due to the sanctions’ exemptions, Member States can continue buying Russian gas and pipeline oil. 
  • 36% of Russian seaborne crude and oil products were transported by tankers owned or insured in price cap coalition countries, while the rest was shipped by ‘shadow’ tankers.
  • EUR 674 mn of Russian oil underwent ship-to-ship (STS) transfers in EU waters. Of which 65% were facilitated by tankers covered by G7+ insurance.
  • Over two-thirds of Russia’s LNG exports worth EUR 446 mn went to the EU.
  • A lower price cap of USD 30 per barrel would have slashed Russian oil export revenues by 26% (EUR 3.51 bn) in July. 
  • Since introducing sanctions until the end of July 2024, thorough enforcement of the price cap would have slashed Russia’s revenues by 8% (EUR 20.91 bn). In July 2024 alone, full enforcement of the price cap would have slashed revenues by 10% (approximately EUR 1.31 bn).

Trends in total export revenue

  • In July 2024, Russia’s monthly fossil fuel export revenues saw a 3%  month-on-month drop to EUR 656 mn per day.
  • Revenues from seaborne crude oil (EUR 219 mn per day) witnessed a 5% month-on-month drop. A significant amount of this drop was due to a 9% drop in the volume of exports.
  • Revenues from crude oil via pipeline (EUR 70.6 mn per day) meanwhile remained similar to earnings in the previous month despite a 6% drop in the volume of exports.
  • There was a 3%  month-on-month rise in Russian revenues from exports of seaborne oil products to EUR 219 mn per day. 
  • In July, Russian LNG export revenues decreased by a significant 18% to EUR 27 mn per day. 
  • Russia benefitted from a 7% month-on-month rise in revenues from pipeline gas to EUR 61 mn per day. 
  • Russian revenues from coal exports saw a 17% month-on-month drop to EUR 57 mn per day. Russian revenues from coal have dropped for four consecutive months due to a multitude of reported factors including a drop in international market prices, increased production costs and ongoing transport capacity limitations.
Russian budget boosted by Mineral Extraction Tax on crude oil exports 
CREA calculates that the Russian budget has seen a 50% year-on-year increase in the first seven months of 2024, largely due to the Mineral Extraction Tax (MET) on crude oil exports. Currently, the average MET without exemptions is RUR 31,134 per tonne (USD 47 per barrel), and with tax exemptions, it is around RUR 20,604 per tonne (USD 31 per barrel). Additionally, companies are subject to a 20% corporate tax. These high tax rates indicate that oil production costs in Russia are very low. Given current prices, the majority of revenues from sales is retained by the state as tax, providing significant funds that are available for financing the full-scale invasion of Ukraine.

Who is buying Russia’s fossil fuels?

  • Coal: From 5 December 2022 until the end of July 2024, China purchased 45% of all Russia’s coal exports followed by India (18%). Turkey (10%), South Korea (10%) and Taiwan (5%) round off the top five buyers list. 
  • Crude oil: China has bought 47% of Russia’s crude exports, followed by India (37%), the EU (7%), and Turkey (6%). 
  • LNG: The EU was the largest buyer, purchasing 50% of Russia’s LNG exports, followed by China (20%) and Japan (18%). 
  • Oil products: Turkey, the largest buyer, has purchased 24% of Russia’s oil product exports, followed by China (12%) and Brazil (11%). 
  • Pipeline gas: The EU was the largest buyer, purchasing 39% of Russia’s pipeline gas, followed by China (28%) and Turkey (25%). 
  • China was the largest buyer of Russian fossil fuels in July, accounting for 43% (EUR 6.2 bn) of Russia’s monthly export earnings from the top five importers. Crude oil comprised 63% (EUR 3.9 bn) of China’s imports from Russia. 
  • In July, China’s global import volumes of seaborne crude (40.2 mn tonnes) dropped to their lowest levels since February 2023. Seaborne crude imports from Russia (4.3 mn tonnes) also dropped to their lowest levels since December 2022 and may be linked to reduced processing margins for refineries amidst low fuel demand. China’s exports of oil products also dropped in July.
  • India was the second-largest buyer of Russian fossil fuels in July. Almost 80% of India’s imports (valued at EUR 2.6 bn) comprised crude oil.   
  • Turkey’s imports were the third highest, comprising 18% (EUR 2.6 bn) of Russia’s total export earnings from the top five importers. 64% of Turkey’s imports from Russia were oil products and 23% comprised seaborne crude oil. At the same time, Turkey exported 478,000 tonnes of oil products to the EU in July, 71% of which came from the ports of Ceyhan, Marmara Ereğlisi and Mersin. CREA and CSD’s investigation suggests that European entities may have imported Russian oil products mixed or re-exported from oil storage terminals in these ports in Turkey.
  • The EU was the fourth largest buyer of Russian fossil fuels in July, 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 (52%) followed by LNG (24%).
  • Brazil bought EUR 494 mn of Russia’s fossil fuels in July, almost all of which comprised oil products. 
  • In July, the top five largest Russian fossil fuel importing countries in the EU paid Russia EUR 1.2 bn. 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. 
  • In July, Ukraine sanctioned the transit of Lukoil crude via the pipeline. CREA will analyse the impact of these sanctions on the supply and demand in landlocked countries.
  • Hungary was the largest importer of Russian fossil fuels within the EU, importing fossil fuels worth EUR 329 mn. Their July imports included crude oil via pipeline valued at EUR 151 mn and gas valued at EUR 179 mn.
  • Italy, the second largest buyer in the EU, purchased Russian pipeline gas worth EUR 278 mn in July.
  • Slovakia was the third-largest importer of Russian fossil fuels within the EU, importing pipeline oil and gas worth EUR 120 mn and EUR 116 mn, respectively.
  • Belgium exclusively imported LNG worth EUR 163 mn.
  • The Czech Republic imported pipeline crude oil worth EUR 166 million and gas worth EUR 92 million, making it the fifth-largest buyer in the EU.
Despite the EU’s declining LNG imports, supply from Russia is growing
 
Global LNG exports to the EU continue to decline. Due to decreasing natural gas consumption in the EU and the rapid refilling of underground gas storage, the EU imported 14% less LNG in the first seven months of this year compared to 2023, and 7% less than in 2022 from all parts of the world. Imports from some countries have seen significant reductions: the US (-13%), Qatar (-22%), Nigeria (-36%), and other destinations (-23%).
Notably, Russia was the only country from which the EU’s LNG imports increased — rising by 13% year-on-year in the first seven months of 2024 compared to the same period last year.

How are oil prices changing?

  • In July, the average Urals spot price dropped 1% month-on-month but remained significantly above the crude oil price cap level, trading at USD 67.61 per barrel.
  • The East Siberia Pacific Ocean (ESPO) prices and Sokol blends of Russian crude oil, primarily associated with sales to Asian markets, rose by 3% and 2% respectively.
  • In July, the discount on Urals grade crude oil widened by 9% month-on-month and was traded at an average discount of USD 16.76 per barrel compared to Brent crude oil.
  • The discounts on the ESPO grade and Sokol blends remained relatively stable and modest at USD 4.23 per barrel and USD 6.11 per barrel, respectively.       
  • 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 July 2024, 36% 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 the oil price cap policy. 
  • 81% of the total value of Russian seaborne crude oil was transported by ‘shadow’ tankers, while tankers owned or insured in countries implementing the price cap accounted for 19%.
  • ‘Shadow’ tankers transporting oil products handled 37% of Russia’s total volume of products in July 2024. The remaining volume was shipped by tankers subject to the price cap policy. 

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

  • In July 2024, 424 vessels exported Russian crude oil and oil products, of which 229 were ‘shadow’ tankers. Over half of these ‘shadow’ tankers (120 in all) had an average age of 17 years. The oldest of these ‘shadow’ tankers was 37 years old, and 30% of these vessels 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 questionable insurance coverage. Their coverage potentially lacks sufficient Protection & Indemnity (P&I) insurance to cover the cost in the event of an oil spill or catastrophe. In 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 cleaning up and compensation resulting from an oil spill from tankers with dubious insurance could amount to over one billion euros for the coastal country’s taxpayers
  • In July 2024, EUR 674 mn of Russian oil underwent ship-to-ship (STS) transfers in EU waters. 
  • 65% 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 235 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 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 that averages USD 15 per barrel) would have slashed Russia’s oil export revenue by 25% (EUR 62 bn) since the sanctions were imposed in December 2022 until the end of July 2024. A USD 30 per barrel price cap would have slashed Russian revenues by 26% (EUR 3.51 bn) in July 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 July 2024, thorough enforcement of the price cap would have slashed Russia’s revenues by 8% (EUR 20.91 bn). In July 2024 alone, full enforcement of the price cap would have slashed revenues by 10% (approximately EUR 1.31 bn).

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

  • Russia’s reliance on tankers that are 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. 
  • Sanction-imposing countries should ban the sale of old tankers to owners registered in countries that do not implement the oil price cap policy. This would help limit the increase of ‘shadow’ tankers used to transport Russian fossil fuels which has been observed since their full-scale  invasion of Ukraine. 
  • We are starting to see the growth in the shadow fleet for LNG tankers which reduces sanctioning countries ability to control the transportation of Russian LNG and weakens their potential to constrict Russia’s export earnings. If G7+ countries do not ban the sale of oil and LNG tankers to owners registered in countries that do not impose sanctions on Russia, this will lead to an increase in Russia’s access to shadow tankers to transport its fossil fuels. 
  • 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 disincentivizing 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 OFAC’s sanctioning of ‘shadow’ tankers has widened the discount Russia offers 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 ‘shadow’ tankers 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, OFSI, 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:

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. 





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  1.  ‘G7+’ refers to the G7 countries, EU member states, Australia, Norway, and Switzerland. ↩︎
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