Asian purchases fell, with Russian oil production rising slowly in July but exports hitting a recent low

From July 1 to 17, Russia produced an average of 10.
78 million barrels of oil per day, which is 0.
6% higher than the June level, indicating that the country's production is still increasing, but the pace of growth has slowed
, according to the CDU-TEK department of the Russian Energy Ministry.

Although the West has been imposing sanctions on Russia after the conflict between Russia and Ukraine, Russia's oil production has slowed for
the third month in a row.

The increase in Russian oil production is due to the fact that the country's refiners have increased their extraction after adapting to Western sanctions
.
Since July, the supply of crude oil from domestic downstream facilities in Russia has reached 5.
75 million barrels per day, about 6%
higher than the June average, the data showed.

Notably, while domestic oil demand was stronger, crude deliveries to key overseas markets by the country through key pipelines and port facilities operated by Transneft PJSC fell nearly 4% to 4.
33 million barrels
per day as of July.

Asian demand may not be a complete replacement for European demand

There are early indications that Russia's plans to shift crude oil export customers from Europe to Asia are not so smooth, and its exports to Asia are now down nearly 30%
from the peak after the conflict between Russia and Ukraine.

Tanker tracking data monitored by Bloomberg shows that Russian sea traffic has been on a downward trend
since mid-June.

As of July 15, Russian oil exports have fallen to 3.
24 million barrels per day, and have been falling for four consecutive weeks
.
Oil exports have fallen by 467,000 barrels per day, or 13 percent
, since mid-June.

Oil flows to Asia accounted for 55%-56% of Russia's total seaborne oil exports over the past six weeks, down
from a high of 63% in the four weeks ended April 15.
In the four weeks to July 15, the average flow of Russian crude to Asia was the lowest in 15 weeks
.

Meanwhile, Russia's weekly net crude oil export tariffs are down from their peak, rising about 25 percent from pre-conflict data but down almost 25 percent from April levels
.

As global recession fears intensify, the IEA previously said in a report that higher oil prices and recession fears have had an impact
on oil demand.

In addition, some emerging Asian countries are on the verge of a debt crisis, which can only limit the demand
for energy imports.
The still spreading coronavirus pandemic is also one of
the negative factors affecting oil demand.

Russia's dwindling crude oil flows to Asia have also led many to believe that Asia will not be able to fully absorb the crude oil imports of the European market
.

But some analysts said that Russia's oil exports are related to global demand, and global demand is still unlikely to decline
in the near future.