Russian shipping still strong
Contracts for delivery of energy, goods being fulfilled before bite of global sanctions fully sinks in
WASHINGTON — Shipping traffic in and out of Russia has remained relatively strong in the past few months as companies have raced to fulfill contracts for purchases of energy and other goods before the full force of global sanctions goes into effect.
With the European Union poised to introduce a ban on Russian oil in the coming months, that situation could change significantly. But so far, data show that while commerce with Russia has been reduced in many cases, it has yet to be crippled.
Volumes of crude and oil products shipped out of Russian ports climbed to 25 million metric tons in April, data from the shipping tracker Refinitiv showed, up from around 24 million metric tons in December, January, February and March, and mostly above the levels of the past two years.
Jim Mitchell, head of oil research for the Americas at Refinitiv, said Russia’s outgoing shipments in April were buoyed by the global economic recovery from the pandemic, and that they did not yet reflect the impact of sanctions and other restrictions on Russia issued after its invasion of Ukraine Feb. 24.
Crude oil typically trades 45 to 60 days before delivery, he said, meaning that changes to behavior following the Russian invasion were still working their way through the system.
“The volume has been slow to decline, because these were contracts that have already been set,” Mitchell said. Defaulting on such contracts is “a nightmare for both sides,” he added.
Russia has stopped publishing data on its imports and exports since Western governments united to announce sanctions and other restrictions. Exports of oil or gas that leave Russia through pipelines can be difficult for outside firms to verify.
But the global activities of the vessels that call on Russian ports to pick up and deliver containers of consumer products or loads of grain and oil are easier to monitor. Ships are required to transmit their identity, position, course and other information through automatic tracking systems, which are monitored by a variety of firms including Refinitiv, MarineTraffic and Kpler.
These firms say shipping traffic was relatively robust in March and April, despite the extraordinary tensions with Russia since its invasion of Ukraine. That reflects both how long some of the sanctions issued by the West are taking to come into effect, as well as an enduring profit motive for trading with Russia, especially after prices for its energy products and commodities have cratered.
Data from MarineTraffic, a platform that shows the live location of ships, indicates that traffic from Russia’s major ports declined after the invasion but did not plummet. The number of container ships, tankers and bulkers — the three main types of vessels that move energy and consumer products — arriving and leaving Russian ports was down about 23% in March and April compared with the year earlier.
Global sanctions on Russia continue to expand in their scope and impact, especially as Europe, a major customer of Russian energy, moves to wean itself off the country’s oil and coal. Trade data suggest that shipments into Russia of high-value products such as semiconductors and airplane parts have plummeted because of export controls issued by the United States and its allies.