Russia's oil exports climb to fresh highs despite threats to slash production

• Russia's crude oil flows climbed to new highs in the four weeks leading up to May 5, Bloomberg data shows.
• Most of those barrels are heading to China and India, which have been buying up discounted supplies.

Russia's crude shipments continued to climb despite Moscow's threat of production cuts three months ago.

In the latest four-week stretch to May 5, seaborne flows reached 3.55 million barrels a day, the highest mark since Bloomberg began tracking the data in early 2022.

Nearly all of Russia's crude exports were sent to China and India over the last month, and volumes to Asia also moved to a new high.

In February, the Kremlin announced production would be reduced by 500,000 barrels a day starting in March, citing Western sanctions on Russian oil. While it's possible for exports to climb while output falls, Russia's explanation hasn't held up.

Moscow has claimed that the higher seaborne exports were offset by a drop in pipeline flows to Europe. But exports via the Druzhba pipeline fell off in January and February, before any supposed output cuts.

The rising seaborne exports continue a trend that was seen throughout March and April. In fact, Russia's oil exports moved above pre-war levels last month. China and India bought about 1.5 million barrels a day, according to Kpler data, and Turkey and Bulgaria were also top buyers.

India used to rely on Russia for less than 1% of its total volumes before the war. Now it buys more than half of its oil from the sanctioned nation, helping to offset the loss of European demand.

To be sure, even as Russia's shipping numbers remain high, returns on those barrels have shrunk. The Finance Ministry said last week, per Bloomberg, that budget proceeds from crude and petroleum products dropped to about a third of last year's level.