Russia's seaborne oil exports remained resilient in February, as the country found new buyers despite the full activation of Western restrictions.

Oil market watchers are closely following Russian export data for signs of turmoil following the ban by the European Union and most of the Group of Seven major industrialized nations on most seaborne imports of oil and fuel in condemnation of the Ukraine invasion. Russian producers relied on buyers from Latin America and Asia with the help of a shadow fleet of oil tankers, ship-tracking data reveals.

The European Union imposed a ban on sea-borne fuel imports in early February, two months after placing restrictions on crude oil shipments. These sanctions come in addition to the price ceiling for Russia's shipments, which other countries must abide by, if they wish to obtain Western services such as freight and insurance.

January exports

Despite this mixture of restrictions imposed during February, Russian producers exported an average of 7.32 million barrels per day of crude oil and petroleum products, according to data from the research company Kpler. To match the volumes issued during December and only 9% less compared to their historical highs last January.

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Victor Katona, Kpler Crude Oil Analyst, explained that the month-on-month decline in Russian seaborne flows was mostly due to an abnormal increase in January exports, partly related to weather disruptions.

He pointed out that the bad weather at the beginning of the current winter resulted in a significant deportation effect of shipments that should have been loaded in December, but were postponed to last January, which reached the level of crude flows at its peak. He added: Storms returned this month again after January, which was relatively lighter, especially in the Black Sea region, with the Novorossiysk port closed repeatedly throughout the month.

India shipments

Despite this resilience, Russia's oil exports are under further pressure as India, the largest buyer of Russia's crude, is under mounting pressure from bankers to prove export shipments adhere to the $60 price ceiling. Tighter monitoring may negatively affect India's purchases of Russian barrels of oil.

The new month's exports may also be affected by the Kremlin's decision to reduce oil production by 500,000 barrels per day in response to the embargo imposed by the West. The main production limit that will be reduced is the country's production level last January, which amounted to approximately 10.86 million barrels per day.

So far, it is not yet clear whether Russian producers will prefer to reduce their crude oil exports or reduce their domestic crude processing operations due to the restrictions imposed on the country. Preliminary plans for March indicate that oil companies intend to keep Russian refineries operating at high capacity to take advantage of the huge tax benefits scheduled to be introduced starting next April.