Western buyers’ voluntary boycott of Russian commodities, known as self-sanctioning, was expected to begin affecting crude oil, liquefied natural gas (LNG), and coal exports in April. Still, there are already signs that flows are easing.
Russia’s invasion of neighboring Ukraine has prompted many Western companies to withdraw their investments in Russia and reduce or halt their purchases of energy commodities, which are the lifeblood of the Russian economy.
While Western governments have not directly sanctioned energy commodities, many companies refrain from purchasing from Russia due to public opposition.
However, there are already signs that exports are slowing, with coal shipments being the most affected so far.
Russia’s coal shipments to Europe totaled 1.16 million tonnes in the first two weeks of March, with vessels that have already sailed or are in the process of being loaded being excluded.
Russia exported 6.16 million tonnes of coal to Asia in February, up from 4.88 million in January, China’s largest buyer.
While Russia’s coal exports are declining, its crude oil shipments appear to be holding steady in March, mainly to Asia.
Russia is on track to export approximately 33.89 million barrels of crude to Asian buyers in March, similar to the 30.02 million in February and slightly lower than the 36.24 million in January.
Crude exports to Europe, on the other hand, are already falling, with actual and potential shipments of 28.72 million barrels in March, down from 69.23 million in February and 72.66 million in January.
While March figures are likely to be revised higher by the end of the month, anything other than a sharp drop in Russia’s crude shipments to Europe would require a massive turnaround from the current situation. Overall, it appears that buyers are already withdrawing from Russian seaborne energy commodities.
Coal may serve as a cautionary tale, as it appears to be the most affected first.
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