Russia seeks new fuel markets in Africa and the Middle East with Europe’s offer

Russia seeks new fuel markets in Africa and the Middle East with Europe’s offer
Russia seeks new fuel markets in Africa and the Middle East with Europe’s offer

Russia is increasing gasoline and naphtha supplies to Africa and the Middle East, as it struggles to sell fuel in Europe, while Asia is already receiving more Russian crude, according to Refinitiv Eikon data and sources.

This development is likely to increase competition for Asian customers between Russia and the other two major fuel exporters, namely Saudi Arabia and the United States, as the three countries are Asia’s largest suppliers.

The European Union has been slowly reducing imports of Russian crude and fuel since March, and agreed to ban them completely by the end of 2022.

Asian buyers quickly increased their purchases of Russian crude, although Asia is not a regular market for Russian fuel because it refines more oil than it needs and is a net exporter of the fuel.

This makes finding new markets such as Africa and the Middle East crucial for Moscow to protect its global market share and avoid a further decline in oil production and exports.

“It seems that Africa and the Middle East are the main options for suppliers of Russian oil products, so we expect more shipments there in the second half of the year with the approach of the European Union ban,” said a trader involved in the trade of Russian oil products.

Moscow exported more than 2.5 million barrels per day of crude and about 2 million barrels per day of fuel to Europe before sanctions were imposed on Russia’s financial sector, making trade much more difficult.

Traders said that Russian oil companies have recently increased their supplies of gasoline and naphtha to Africa and the Middle East from the Baltic states. Before the sanctions, most Russian supplies there came from the Black Sea ports.

At least five shipments of about 230,000 tons of gasoline and naphtha were delivered between May and June from the Baltic Sea port of Ust Luga to Oman and to the Fujairah oil hub in the United Arab Emirates, according to Refinitiv data.

The data showed that the total supplies of naphtha and gasoline from Russian ports to Oman and the UAE amounted to nearly 550,000 tons this year, compared to zero in the whole of 2021.

Nigeria and Morocco have been major destinations in Africa for Russian gasoline and naphtha in the past few months, according to Refinitiv Eikon and Trader data, while several shipments have been made to Senegal, Sudan, Ivory Coast and Togo.

Refinitiv Eikon data showed that the total Russian monthly supplies of gasoline and naphtha to the region amounted to about 200,000 tons over the past few months, including shipped quantities from storage depots in the ports of Latvia and Estonia.

Refinitiv data and Reuters calculations showed that Russian diesel shipments to African countries reached 1 million tons so far this year, up from 0.8 million tons in the January-June 2021 period, with Senegal and Togo as major destinations.

Imports of Russian fuel oil into Fujairah, the UAE’s oil hub, jumped sharply in May.

Traders said that despite rising freight costs, the supply of Russian oil products to Africa and the Middle East is helping trading companies maintain profit margins as the options to resell oil products in Europe are limited due to the sanctions.

“Sohar (in Oman) and Fujairah (in the UAE) can provide storage and blending capabilities for all these barrels as European ports start rejecting Russian oil products,” said a market Source involved in the Russian oil products trade.


The article is in Arabic

Tags: Russia seeks fuel markets Africa Middle East Europes offer

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