Russia increased seaborne fuel oil and vacuum gasoil exports to India and Turkey in May as falling oil product prices attracted buyers, while the hot summer season required more fuel for energy production, trade and shipping data showed.
Oil prices fell to four-year lows as an OPEC+ decision to expedite its output hikes stoked fears about rising global supply at a time when the demand outlook is uncertain.
Since the European Union’s full embargo on Russian oil products went into effect in February 2023, Asian countries have become the main destination for Russia’s fuel oil and VGO supplies.
According to LSEG data, dirty oil products loadings from Russian ports to India almost doubled last month from April to 0.6 million metric tons.
India imports straight-run fuel oil and VGO from Russia as a cheaper alternative to Urals crude oil in its refinery feedstock pool.
Meanwhile, India’s Reliance Industries and Nayara Energy imported 37% and 3% less Russian oil last month, respectively, than in April.
Russia’s seaborne fuel oil and vacuum gasoil exports to Turkey rose 75% month-on-month in May to 0.43 million tons, shipping data shows.
Saudi Arabia was the main importer of Russian seaborne fuel oil last month, though loadings fell 17% from April to 0.7 million tons. The country has turned to importing more discounted Russian fuel oil for summer since 2023 as its prices declined following an EU embargo on the import of oil products from Russia.
Singapore and China were also among the other top destinations for Russian fuel oil and VGO export supplies in May, according to LSEG data.
Meanwhile, Russia’s fuel oil supplies to Asia via the African Cape of Good Hope fell in May to around 85,000 tons, the lowest level since the start of the year.
Traders have been diverting Russian oil products cargoes around Africa since December 2023 to avoid the Red Sea due to a heightened risk of attacks by Yemen’s Iran-aligned Houthi group.
The escalation of military strikes between Iran and Israel could also force shipowners to avoid the Red Sea routes on their way to Asian countries.
Source : Reuters
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