At least 500,000 tonnes of the fuel have been discharged at Fujairah and Saudi Arabia in March, shiptracking data from Refinitiv, Kpler and Vortexa showed, compared with almost no Russian arrivals a year earlier. The Middle East took up slightly over 10% of Russia's exports loading in February and March.
The European Union banned imports of Russian crude and oil products in December and February, respectively, forcing shipments to go elsewhere. Curbs on access to Western insurance and ships have made it difficult to sell Russian oil, with traders opting to store the oil at hubs such as Fujairah before re-exporting it.
SAUDI ARABIA Top oil exporter Saudi Arabia imported 261,000 tonnes of Russian diesel in March and early April, the largest volume it has ever received from Russia. One of the cargoes went to Ras Tanura, while three were discharged at Jeddah, Refinitiv and Vortexa data showed. March-loading Russian diesel cargoes traded at $60 to $70 per barrel on a free-on-board basis, equivalent to a discount of about $20 per barrel to the Middle East benchmark, two traders said. That is below the price cap of $100 a barrel set by the G7 grouping, which allows traders access to Western ships and insurance services. "The discounts would need to be large, given freight rates plus (high) risk premium, to ensure the costs are still less than the alternative marginal barrel," said Mark Williams, research director at Wood Mackenzie.
EXPORTS The Middle East's monthly diesel exports to northwest Europe averaged above 1 million tonnes for the first quarter of 2023, up from 785,000 tonnes a month in 2022's final quarter, data from Refinitiv showed.
March-loading exports to Africa hit a four-month high of 2.57 million tonnes, up from a monthly average of about 1.3 million in 2022, Refinitiv data showed, while volumes to Asia were at a new high for March.
"Middle Eastern exports to Asia rose to 150,000 barrels a
day in March, filling some of the void left by slower Chinese
exports," Energy Aspects analysts said in a note.
Saudi Arabia ramped up diesel exports from Yanbu and Rabigh,
where state giant Saudi Aramco operates joint venture
refineries with Exxon Mobil Corp , Sinopec ,
TotalEnergies , and Sumitomo Chemical , to
Europe, the data showed.
Aramco did not immediately respond to an email query from
Reuters.
More exports could come from Saudi Aramco's Jizan and
Kuwait's Al Zour refineries will boost output this year, in
addition to Oman's Duqm project, which is starting up in the
third quarter.
Rising supplies could weigh on global refining margins,
which could hit $6.60 a barrel in the fourth quarter, down from
an average of $11 in the corresponding 2022 quarter, Wood
Mackenzie analysts told clients in a note.
Vessels sending Russian diesel to Saudi Arabia
Vessel Volumes Destination Arrival
name date
Chai 66KT Jeddah April 4
Galatia 63KT Jeddah April 4
Apanemo 66KT Ras Tanura March 8
Srini 66KT Jeddah March 5
source:
Refinitiv
(1 tonne=7.45 barrels)
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Middle East's diesel exports to Europe Asia gasoil cracks ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Trixie Yap in Singapore and Natalia Chumakova in
Moscow; Editing by Florence Tan and Clarence Fernandez)
