Cutting off the financial lifeline! After targeted strikes on the oil export ports, Russia's oil transportation volume plummeted.

Ask AI · How drone strikes precisely weaken Russia’s oil revenue sources?

According to Bloomberg report on March 31, the oil export volume from Baltic ports has fallen to the lowest level since Russian troops entered Ukraine in 2022 — due to targeted drone strikes on key ports, weekly oil shipments from Russia’s Baltic ports have dropped to the lowest since the full-scale invasion of Ukraine in 2022. These strikes directly cut into Russia’s military budget funding sources.

Multiple attacks on the Primorsk and Ust-Luga export terminals caused oil storage tanks to catch fire, forcing most loading operations to halt last week. As a result, port oil transportation dropped to about one-third of the previous week, reducing Moscow’s oil revenue by over $1 billion. As of the week ending March 29, Russia’s weekly oil export income fell from $2.45 billion to $1.44 billion.

At the time of these attacks, Russian forces were profiting from conflicts in the Middle East. Russia had been steadily increasing exports to the region, with local crude oil prices doubling within a month. The average price of Ural crude oil rose by $11.30 to $73.24 per barrel, but due to a sharp decline in export volume, revenue still plummeted.

Meanwhile, the de facto closure of the Strait of Hormuz also impacted global oil transportation. Last week, Russia’s daily crude oil transport decreased by 1.75 million barrels, from 4.07 million barrels the previous week to 2.32 million barrels; the four-week average transport volume was less affected, decreasing by 280k barrels per day to 3.31 million barrels, the lowest average in two months.

Russian oil companies have warned buyers that force majeure may be declared on supplies to Baltic ports, but they are still maintaining some shipments through offshore inventories. While oil transport volume has declined, the volume of tankers previously stranded at sea for shipment has increased. This month, Russian crude oil arriving in India averaged nearly 1.7 million barrels per day, up from 1.1 million barrels in February.

This is facilitated by US waivers allowing the purchase of Russian oil loaded before March 12, helping to deplete Russia’s offshore oil inventories — which peaked at 140 million barrels in January. As of Sunday, due to higher delivery volumes than new shipments, offshore inventories decreased to 118 million barrels. Russia has also found new buyers; the Philippines received two ESPO crude oil ships, marking the first such transactions since 2021.

Oil tankers carrying Russian oil are beginning to avoid the North Sea and the English Channel, after the UK announced it would intercept and board Russian “shadow fleet” vessels in its waters. Ships traveling between the Baltic ports now have to detour around northern Scotland, adding about two days and 25% more distance compared to the usual routes between the UK and France, from the Baltic to the Mediterranean.

Following escalated drone attacks on Russian energy facilities, Russian oil producers have warned buyers that force majeure may be declared on supplies to major Baltic ports.

Industry sources confirmed this possibility on March 27. After the international community relaxed sanctions on Russian oil to compensate for global supply disruptions caused by conflicts in the Middle East, this core revenue source for Russia has been physically impacted.

Author statement: Content quoted from external media.