Russian Oil Exports Drop Sharply in November
In November, Russian oil exports experienced a significant drop as buyers became more wary of the risks associated with tighter US sanctions, according to the latest report from the International Energy Agency (IEA).
The agency noted that Russian oil exports decreased by 420 kb/d (thousand barrels per day) in November, and the mix of reduced shipments and declining prices led to Moscow's oil revenue falling to $11 billion, which is $3.6 billion lower than last year.
IEA reported, "Russia's overall oil exports dropped by about 400 kb/d in November to 6.9 mb/d, as purchasers evaluated the consequences and dangers linked to tougher sanctions." The decrease in exports resulted in a significant drop in Urals crude prices, falling by $8.2/bbl (bbl is barrel, roughly 159 litres) to $43.52/bbl, lowering export revenues to their minimum since the onset of the Ukraine conflict in February 2022.
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The United States has cautioned multiple nations that they may encounter extra tariffs and punitive trade actions if they persist in buying Russian oil. It has implemented a further 25 percent tariff on imports from India, referencing ongoing acquisitions of Russian oil. This was alongside the 25 percent tariff previously declared by US President Trump.
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The IEA reports that worldwide oil supply decreased by 610 kb/d in November, expanding total reductions from September's peak of 109 mb/d to 1.5 mb/d. The report highlighted that OPEC+ represented over three-quarters of the total decrease, primarily due to supply issues in sanctions-affected Russia and Venezuela.
The group accounted for 80 percent of the supply decline in the last two months, highlighting significant unexpected outages in Kuwait and Kazakhstan, along with ongoing reductions in Russia and Venezuela.
Meanwhile, Iran's oil exports have stayed robust at approximately 1.9 mb/d recently. The primary factors in the overall supply decline among non-OPEC+ producers were the United States, Brazil, and biofuels.
Despite recent constraints, the IEA indicated that worldwide oil supply is projected to increase by 3 mb/d in 2025 and by an additional 2.4 mb/d in 2026. Global oil demand is projected to increase by 830 kb/d in 2025, driven by enhanced macroeconomic and trade factors. The agency has revised its 2026 demand forecast to 860 kb/d, which is an increase of 90 kb/d from the previous estimate.
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The report highlighted that gasoil and jet/kerosene will account for half of the demand increase this year, while fuel oil keeps declining due to being replaced by natural gas and solar energy in power generation. At the same time, disruptions in refineries and impending EU limits on products made from Russian crude have driven product cracks and refining margins to their highest levels in three years as of November, according to the IEA