Russian oil exports could drop next month if prices slide, as a hike in duties threatens to render many marginal routes unviable, traders said on Friday.
Russia is the world's second largest crude exporter and booming output has made it one of the most promising sources of extra barrels to fill a tight international market.
But crude export duties are set to soar to $69.90 a tonne on August 1 from $41.60 with the launch of new calculation methods.
That will boost state revenues but slash netbacks for exports shipped via rail and river and potentially hit Russia's overall exports.
"With high prices for Brent, rail shipments will still be large," a trader with a major Western oil company said. "But they will become much more sensitive to Brent's level."
Russian output hit a post-Soviet record of 9.23 million barrels per day (bpd) in June, but a pipeline capacity shortage means up to a fifth of its 5.0 million bpd crude exports leave by rail or river.
If Brent sold for $39 a barrel, the revenues an oil firm receives for selling a barrel of oil abroad after deducting shipping, freight, transportation and tax costs - the netback - would mean most export routes staying profitable. Brent was trading just over $38 on Friday.
A firm shipping from mainstay West Siberian fields via pipeline monopoly Transneft would receive a netback of between $22 and $23 a barrel under the new duties, a trader said.
Railway or mixed rail/pipeline routes can also give high netbacks if the route is short. Shipments from Usinsk to the White Sea port of Vitino would give a netback of around $19 a barrel.
Longer routes wholly within Russia, such as rail shipments to Novorossiisk on the Black Sea, would give $16 to $17. But netbacks after transiting other states would be as low as $10.
The duties will be in force for two-months and many routes would become unprofitable if Brent were to slip even a few dollars.
With production costs of around $14 a barrel not included in the netback calculation, rail shipments to Ukrainian Baltic ports such as Theodosia, Odessa, Ventspils and Butinge look set to become unprofitable immediately, traders said.
YUKOS is the major player in Theodosia, sending around 150,000-200,000 bpd before recent Ukrainian rail tariff hikes prompted it to slash volumes to the port.
The company ships most of its 100,000 bpd Butinge volumes by pipeline, and says it has paid for additional rail cargoes through August.
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