NO LARGE DISRUPTION SEEN IN SOVIET EXPORTS AFTER COUP ATTEMPT

Seaborne and pipeline exports of crude oil and products from the Soviet Union showed no significant disruption after last month's abortive coup. Communist hardliners failed to make their ouster of President Mikhail Gorbachev stick, and he returned to Moscow Aug. 21 (OGJ, Aug. 26, p. 27). The International Energy Agency says considerable uncertainty surrounds the volume and makeup of Soviet oil exports in the coming months. That's due to recent political events and possible extension of

Sept. 16, 1991

3 min read

Seaborne and pipeline exports of crude oil and products from the Soviet Union showed no significant disruption after last month's abortive coup.

Communist hardliners failed to make their ouster of President Mikhail Gorbachev stick, and he returned to Moscow Aug. 21 (OGJ, Aug. 26, p. 27).

The International Energy Agency says considerable uncertainty surrounds the volume and makeup of Soviet oil exports in the coming months. That's due to recent political events and possible extension of decentralized control of oil operations.

IEA's end of August oil market report said Soviet oil exports, based on the latest July tanker tracking data, are estimated at 2.3-2.4 million b/d in recent weeks, made up of 1.4-1.5 million b/d of crude and 900,000 b/d of products.

An IEA breakout for the first 6 months of this year showed that Soviet exports to all destinations dropped by 800,000 b/d from first half 1990, a 26% decline. The figure is based on Organisation for Economic Cooperation and Development trade data, tanker sailings, and industry estimates.

IEA said Soviet crude oil deliveries to the OECD area, excluding eastern Germany, were down 420,000 b/d in the first half of this year. However, product exports rose by 70,000 b/d.

Figures for deliveries to non-OECD destinations, excluding reexports of non-Soviet oil, are at best only estimates, the agency said. But figures for observed exports were broadly in line with Soviet government data released in mid-August showing a drop of 1.1 million b/d in Soviet oil production, excluding gas condensate, in the first 6 months.

Data on primary stocks are not disclosed.

TANKER PROBLEMS

Declining exports are running parallel to problems in the Soviet tanker industry.

A report by Lloyd's Shipping Economist, London, said current upheavals at Sovcomflot, the state shipping organization, could thwart plans to modernize the Soviet tanker fleet.

Existing crude, product, and chemical tankers are trading outside the Soviet Union to raise foreign currency while newbuildings still in U.S.S.R. Far East yards may have to be sold, again to generate foreign currency.

Looking at the Sovcomflot fleet at the beginning of August, the Lloyd's magazine said only two of 22 tankers, combination carriers, and chemical carriers had made recent calls at Soviet ports. The rest were employed in a variety of trades around the world.

Ironically, Lloyd's Shipping Economist said, the slide in Soviet oil exports may in the short term ease the pressure on the Soviet's aging tanker fleet. But if export volumes can be stabilized or even increased, opportunities for independent tanker owners on the Soviet oil trades would increase sharply.

PRODUCTS SUPPLY/DEMAND

The IEA report also highlights problems in the refining industry where utilization fell by 2 percentage points in the first half of this year while gasoline and diesel fuel production fell by 4-5%.

The large drop in gasoline production was accompanied by reports of spot shortages. To ease shortages during harvest in the southern republics, imports of low quality gasoline, mainly from Greece and Romania, started in July.

In the first 6 months of the year apparent Soviet oil demand declined only 200,000 b/d, or 2-3%. That's considerably less than the underlying decline in economic activity, possibly caused by colder than normal weather in the first quarter and a coal miners' strike in March and April.