PORT PROBLEMS CRIMP EXPORTS OF RUSSIAN OIL

PORT PROBLEMS CRIMP EXPORTS OF RUSSIAN OIL

Freezing temperatures and high winds at the Black Sea port of Novorossiysk are continuing to cause severe disruptions to oil exports from the main loading point of sea-borne Russian oil exports, leading to a significant rise in values for Urals crude.

Novorossiysk has been shut for most of the last three weeks, leading to severe disruptions at the port. While delays to oil exports are a regular feature of trading Urals during the winter, the current situation is causing a significant problem, one dealer said.This is because any delays to loadings at Novorossiysk mean these barrels are lost to the market. The Russian export system is such that oil cannot easily be diverted to the other Black Sea ports of Odessa and Tuapse or to the Latvian port of Ventspils on the Baltic Coast.

"In the short term, the availability of Urals crude is very inflexible," one Urals trader said.

Some crude is exported through Odessa, but volume is limited. One refiner source said his company recently loaded a cargo of Urals from Odessa, where he experienced less serious delays.