1. Report Industry Investment Rating - Crude oil: Oscillating [1] 2. Core Viewpoints of the Report - Since the Russia-Ukraine conflict, Russia's supply has shown strong resilience, and its crude oil exports have remained stable this year. A short - term decline in domestic refinery processing volume will increase crude oil export demand. The sanctions imposed by the US and Europe on major Russian oil companies since October may lead to a short - term reduction in buyers' purchases of Russian oil. In the long run, if sanctions do not escalate further, trade flows may gradually recover with the establishment of new sales channels. However, if sanctions continue to escalate and some buyers withdraw, the limited potential buyer group will restrict trade flow space, increasing the risk of Russian supply disruptions. Currently, due to high uncertainties in the Russia - Ukraine situation, the market has not priced in the scenario of the US severely restricting Russian oil exports, so the risk premium of oil prices is relatively mild, and it is difficult to drive oil prices to rise continuously [4][58] 3. Summary According to the Directory 3.1 Russia's Domestic Energy Facilities Attacked, Crude Oil Export Demand Rises - In the first ten months of this year, Russia's exports of crude oil and petroleum products decreased slightly, mainly due to lower exports in the first half of the year compared to last year. The average seaborne crude oil export volume was about 3.46 million barrels per day, a year - on - year decrease of 50,000 barrels per day. Since July, due to attacks on refineries, the crude oil processing volume has decreased passively, and the crude oil export volume has been significantly higher than the seasonal level. In contrast, the decrease in processing volume has led to a continuous decline in petroleum product exports, reaching the lowest level since 2021, with an average of 2.28 million barrels per day in the first ten months, a year - on - year decrease of 160,000 barrels per day [13] - The seaborne crude oil trade flow is relatively stable, with buyers mainly concentrated in India, China, and Turkey, with seaborne export volumes of 1.76 million barrels per day, 1.18 million barrels per day, and 330,000 barrels per day respectively. Russia's seaborne crude oil exports to the EU and G7 countries have basically stopped since 2024. The trade flow of petroleum products is more dispersed, with Africa, Asia, and Turkey being the main export markets, and a small amount is exported to South America [15] - Since August, the number of drone attacks on Russian energy facilities has increased significantly, including refineries, pumping stations, and ports. The decrease in refinery processing volume has had a negative impact on petroleum product exports. Port safety is also crucial for supply stability, and any threat to port operations will increase the risk of supply disruptions [18][19] 3.2 Outlook for Russia's Crude Oil Supply and Trade Flow under the Escalation of Sanctions by the US and Europe 3.2.1 The US and Europe Expand Sanctions on Russian Oil Companies, and the Impact of Ship Sanctions Is Limited - In October 2025, the UK and the US successively announced sanctions on two major Russian oil companies, Rosneft and Lukoil, and their major subsidiaries. The EU also passed the 19th round of sanctions against Russia. The potential "secondary sanctions" risk may lead some buyers to reduce their purchases of Russian crude oil to avoid being sanctioned [24][25] - Russia's oil supply is concentrated in four major oil companies, accounting for 77%. Currently, the top four Russian oil companies have all been included in the US sanctions list. After Gazpromneft and Surgutneftegaz were sanctioned in January, their direct crude oil exports decreased significantly. Some new exporters that entered the market in May this year and Rosneft took over the export business, indicating that the market has found ways to adapt to sanctions and maintain trade flows [26] - The US, Europe, and other countries have continuously expanded sanctions on the "shadow fleet" transporting Russian oil, but the actual effect is limited. Although some ships continue to transport Russian oil after being sanctioned, the proportion of Russian crude oil transported by the "shadow fleet" has shown a downward trend [28][29] 3.2.2 New Obstacles for Buyers to Purchase Russian Oil, Focus on the Establishment of New Sales Channels - Indian and Turkish companies are highly sensitive to US sanctions. After the US imposed sanctions on Russian oil companies, Russia's exports to India and Turkey may face short - term volume reduction risks. India may have about 1 million barrels per day of Russian oil supply facing volume reduction or the need to change sellers, and maintaining imports depends on the establishment of new "compliant" sales channels [33][34][35] - Turkey imports about 300,000 barrels per day of Russian crude oil, facing a high risk of volume reduction. The EU has stopped most of its imports of Russian seaborne crude oil and petroleum products, but there are still some pipeline exports to Hungary and Slovakia, which may face increasing interruption risks in the future [41][43] 3.2.3 The Space for Russia to Adjust Its Crude Oil Trade Flow Again May Be Limited - If India or Turkey cannot maintain Russian crude oil imports through new sales channels, Russia may face difficulties in finding new buyers. The relatively high logistics cost of transporting Russian oil to China and the competition from other sensitive oils may limit the trade flow adjustment space. If the potential buyer group is limited, the risk of a decline in Russian supply will further increase [45][48] 3.3 Petroleum Products: The 18th Round of EU Sanctions Awaits Implementation, and the Regional Mismatch of Diesel Supports Crack Spreads - The EU's 18th round of sanctions against Russia will ban the import of petroleum products refined from Russian crude oil starting from January 21, 2026. The EU's new regulations on diesel imports may lead to changes in the diesel trade flow, and the EU may rely more on imports from the Middle East and the US in the future. This may intensify the competition for compliant resources and support crack spreads [54][57]