Russia’s Oil Flows to Various Markets So Far in 2023

With 3 charts

EOA’s Main Takeaways:

1. Wagner’s rebellion has NOT added new risks to Russian oil exports

2. Russian crude exports are NOT competing with Saudi crude exports to Asia

3. Exports of Russian petroleum products to Turkey, Saudi Arabi, and Brazil have increased

In Detail

The recent events in Russia have left some analysts wondering about the future risks the oil market needs to consider amid the ongoing war in Ukraine. Goldman Sachs Group Inc. said the recent turmoil has triggered new risks in the global oil market, albeit the near-term impact was likely to be limited.  Meanwhile, BC Capital Markets LLC analysts said that although tensions have now receded following Wagner forces' rebellion, "the risk of further civil unrest in Russia now must be factored into our oil analysis for the back half of the year,” according to a report by Bloomberg.

We were ahead of everyone on June 24 when we said that the recent developments in Russia will have no impact on global oil markets.  Unlike what Goldman Sachs said, the risks have not changed.  Even in the event of a military coup in the future, any new government cannot survive without revenues from hydrocarbons. For this reason, it is our view that the risks to Russia’s oil and gas fields are low for now and based on the current circumstances. The recent developments should not raise questions about Russia’s oil flows which were not affected, but rather about the future of the Wagner mercenary group which is not only fighting in Ukraine but also in the Middle East and North Africa.