Russia Seeks New Fuel Markets in Africa and Middle East as Europe Pulls Away

MOSCOW: Russia is growing gasoline and naphtha provides to Africa and the Center East because it struggles to promote gasoline in Europe, whereas Asia is already receiving bigger volumes of Russian crude, Refinitiv Eikon information confirmed and sources mentioned.

The event is prone to improve competitors for Asian clients between Russia and different main gasoline exporters, Saudi Arabia and the US, that are Asia’s prime three suppliers.

The European Union has slowly lower imports of Russian crude and gasoline since March and agreed to a full embargo that may take impact on the finish of 2022.

Asian consumers have stepped in to quickly improve purchases of Russian crude, though Asia is just not a pure marketplace for Russian gasoline as a result of it refines extra oil than it wants and is a web exporter of gasoline.

That makes discovering new shops like Africa and the Center East paramount for Russia to guard its world market share and keep away from a deeper drop in oil exports and manufacturing.

β€œAfrica and the Center East seem like the primary choices for suppliers of Russian oil merchandise, so we anticipate extra shipments there within the second half of the yr because the EU embargo attracts nearer,” a dealer concerned within the commerce informed Reuters. commerce in Russian petroleum merchandise.

Russia exported greater than 2.5 million barrels per day (bpd) of crude and a few 2 million bpd of gasoline to Europe earlier than the sanctions on the Russian monetary sector, which have made commerce very troublesome.

Russian oil corporations have lately elevated provides of gasoline and naphtha to Africa and the Center East from the Baltic states, merchants mentioned. Earlier than the sanctions, a lot of the Russian provide to the areas got here from Black Sea ports.

In accordance with Refinitiv information, no less than 5 shipments containing some 230,000 tonnes of gasoline and naphtha had been delivered between Might and June from the Baltic port of Ust-Luga to Oman and the UAE oil hub of Fujairah.

In complete, provides of naphtha and gasoline from Russian ports to Oman and the United Arab Emirates totaled nearly 550,000 tonnes this yr in comparison with zero in all of 2021, the information confirmed.

Nigeria and Morocco have been the highest locations in Africa for Russian gasoline and naphtha in latest months, Refinitiv Eikon information confirmed and merchants mentioned, whereas a variety of cargoes had been additionally provided to Senegal, Sudan, CΓ΄te d’Ivoire and Togo.

Total month-to-month provide of Russian gasoline and naphtha to the area was about 200,000 tonnes for the previous few months, together with volumes shipped from storage at ports in Latvia and Estonia, Refinitiv Eikon information confirmed.

Russian diesel shipments to African international locations have reached 1m tonnes for the reason that begin of the yr, up from 0.8m tonnes in January-June 2021, with Senegal and Togo prime locations, Refinitiv information and calculations confirmed. from Reuters.

In Might, Russian gasoline oil arrivals on the UAE oil hub of Fujairah additionally elevated sharply.

Regardless of increased transport prices, supplying Russian oil merchandise to Africa and the Center East helps buying and selling corporations protect margins, as choices to resell oil merchandise in Europe have been restricted as a consequence of sanctions, retailers mentioned.

“Sohar (in Oman) and Fujairah (within the UAE) might provide storage and mixing capacities for all these barrels, whereas European ports have began to reject Russian oil merchandise,” mentioned a market supply concerned within the commerce. of Russian oil merchandise.

DOMESTIC MARKET DISTURBANCE

The change in Russia’s export markets has resulted in an unprecedented disparity in Russia’s home market. Summer time-grade diesel at the moment trades at costs 30 to 40 p.c increased than gasoline, in line with Reuters information. Gasoline is often costlier than diesel.

Russia beforehand exported gasoline and naphtha to European buying and selling hubs however needed to look to Africa and the Center East amid weak demand in Europe, merchants mentioned.

Consequently, the home costs of those merchandise in Russia have collapsed because of the ample provide.

Russian gasoline traded $250-300 per ton beneath the unapproved European product, which was most lately valued at round $1,330 per ton on an FOB foundation.

Diesel cargoes had been discounted a lot much less, about $40-50 a tonne beneath unapproved European product, as a result of demand continues to be sturdy, merchants mentioned.

Leave a Comment