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Russian oil production fell by just 40 thousand b/d m/m to 11.25 mb/d in September (-0.60 thousand b/d y/y), as Russia continues to pump above its OPEC+ target of 11.19 mb/d to make up for lost output during the Urals contamination crisis. Output in the year-to-date has averaged 11.25 mb/d, higher y/y by 0.17 mb/d. We expect Russian output to hold around this level for the remainder of the year (11.24 mb/d for Q4 19), with output stabilising over the winter months.
Russian crude exports fell m/m by 40 thousand b/d to 5.08 mb/d (+0.28 mb/d y/y) in September, despite a partial recovery in Baltic loadings. Ust-Luga loaded 15 cargoes (vs six in August), as pipeline flows to the port were still restricted due to logistical issues related to storing contaminated Urals. Preliminary October Urals loadings from all ports are up m/m by 60 thousand b/d, led by Ust-Luga returning to a more typical 31 cargo (0.72 mb/d) programme. But Primorsk loadings will drop by 0.20 mb/d m/m to 0.92 mb/d. Planned October Black Sea loadings are lower m/m by 0.15 mb/d, with both Urals and Siberian Light programmes down.
Kazakhstan’s crude supply fell m/m by 0.1 mb/d to 1.78 mb/d in August (+0.11 mb/d y/y) as Tengiz underwent maintenance from 1 August to 12 September. We expect September output to remain low amid work at Karachaganak from 15 September to 13 October. Azerbaijan’s crude and condensate output fell m/m by 29 thousand b/d to 0.75 mb/d (-25 thousand b/d y/y) in August as production was impacted by maintenance.
FSU demand rose by 0.10 mb/d y/y to 4.48 mb/d in August, with growth slowing from July’s sharp m/m rise of 0.20 mb/d. Final Russian data show y/y growth of 0.3 mb/d in July, with strength seen across all products. With the macro backdrop weak, we remain sceptical of these figures and expect them to be revised lower.
FSU runs rose m/m by 0.12 mb/d to 7.1 mb/d in August (+0.3 mb/d y/y) following the start-up of the new 0.12 mb/d CDU at Tatneft’s 0.3 mb/d Nizhnekamsk refinery in Russia. This boosted runs in the country to over 6 mb/d, higher y/y by 0.24 mb/d. SOCAR Energoresurs resumed production at the 0.18 mb/d Antipinsky refinery, which should put a floor under Russian runs, though hefty seasonal maintenance continues to weigh.
Despite higher runs, September ULSD loadings at Primorsk remained low at 0.19 mb/d (+10 thousand b/d m/m and -0.1 mb/d y/y). Returning capacity at the Kirishi refinery and a full diesel programme from the Antipinsky facility mitigated maintenance at Nizhnekamsk and Omsk. Preliminary October diesel loadings are higher by 72 thousand b/d m/m at 0.26 mb/d.