MOSCOW, Aug 24 (Reuters) – Under pressure from Western sanctions, Russia is exporting more fuel oil to Asia and using ship-to-ship transfers to build larger cargoes for distant markets, according to traders and Refinitiv data.
The European Union has been reducing imports of Russian oil products since March and has agreed a full ban from February 2023.
In August, fuel oil exports from Russia to the Netherlands and Estonia fell to zero from 365,000 tonnes and 170,000 tonnes, respectively, in July, Refinitiv data showed.
Meanwhile, fuel oil shipments from Russian ports to Singapore could top 350,000 tonnes this month, after no shipments in June or July, the data showed, while exports for ship-to-ship (STS) loading off Greece’s Kalamata port have risen by a quarter month-on-month to almost 1 million tonnes.
Last month, market sources told Reuters the EU could ban the import and transit of some fuel oil from Russia about six months ahead of plan – from Aug. 10 – due to its aromatic content, which could subject the product to the embargoed custom code 2707.
“The issue with 2707 code looks pretty real”, one trader said.
In Singapore, fuel oil can be used as bunker fuel, or stored in VLCC-class supertankers. STS operations allow bigger vessels to be loaded, making shipping to Asia cheaper, traders said.
While the United States and EU are spurning fuel oil from Russia, its supplies to Asia and the Middle East, as well as some African states, are growing.
Saudi Arabia, the world’s largest oil exporter, more than doubled the amount of Russian fuel oil it imported in the second quarter to feed power stations for a summer surge in air-conditioning and free up its own crude for export.
(Reporting by Reuters. Editing by Mark Potter)
(c) Copyright Thomson Reuters 2022.
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