European countries are replacing Russian supplies of diesel fuel, increasing imports from India, Saudi Arabia, China, Kuwait, Malaysia and even Togo.
In February, Russia redirected its diesel export supplies to Africa and Asia, as well as to ship-to-ship (STS) loads. The reason for this was the embargo, which closed European markets for fuel of Russian origin.
This is evidenced by data from traders and the analytical platform Refinitiv, writes Reuters. It is noted that Russia has long been the main supplier of diesel fuel to Europe.
However, according to Refinitiv Shipping, the bulk of diesel and gas oil cargoes from the Russian Black Sea ports of Tuapse and Novorossiysk are now heading towards Turkey, as well as Oman, Togo and Tunisia.
Russian Black Sea ports still had proximity to the Turkish market for diesel, while exporters from the Baltic ports of Primorsk and Vysotsk had to replace European destinations with much longer voyages, driving up freight costs.
“Shipowners are probably the main beneficiaries of this whole situation because of longer routes and higher freight rates,” one trader said.
Since the beginning of February, Russia has been diverting volumes of diesel fuel from the Baltic ports to Morocco, Algeria, Ghana, Tunisia and Brazil.
Also, according to Refinitiv, two cargoes carrying about 130,000 tons of diesel fuel are heading from the port of Primorsk to the port of Jeddah in Saudi Arabia.
In addition, Refinitiv data also shows that some shipments were shipped with opaque designations such as “Gibraltar on order”, “Ceuta on order” or even simply “on order”. Traders consider such applications as either not having a buyer or booked for offloading to another vessel.
According to Refinitiv, European countries are replacing Russian diesel supplies with increased imports from India, Saudi Arabia, China, Kuwait, Malaysia and even Togo.
Oil embargo against Russia – what is known
As reported, the EU oil embargo against Russia entered into force on December 5, 2022. The decision provides for a ban on the export of Russian oil if its price is higher than the established “ceiling”.
In order to implement the embargo, the Council of the EU set a ceiling price for Russian oil at the level of $60 per barrel. The price ceiling means that from December 5, the European Union, the United Kingdom, the United States, Canada, Japan and Australia will provide services related to the sea transportation of Russian oil only if it is purchased at or below a set ceiling price.
Also, from February 5, 2023, an embargo on Russian oil products – diesel fuel and fuel oil – entered into force. The day before, the Council of the EU approved the price of petroleum products. Yes, now oil products, the price of which is lower than the cost of crude oil (according to the ceiling price of $60), can be sold at a price of no more than 45 USD per barrel. And for diesel fuel and other petroleum products, which are more expensive than oil, the price ceiling is set at $100 per barrel.