Column: The growing flow of Russian oil products to China, India and the Middle East: Russell | – #Column #growing #flow #Russian #oil #products #China #India #Middle #East #Russell
LAUNCESTON, Australia, February 16 (Reuters) – Russia Similar to what is already happening with crude oil, there are signs that the country’s refined fuels are finding new buyers outside of Europe, with Asia and the Middle East leading new customers.
As part of efforts to punish Moscow for its invasion of Ukraine on February 24 last year European Unionin addition to previous sanctions against crude oil, from February 5 Russia banned the import of oil products.
RussiaBrent, West Texas Intermediate and Oman/Dubai have largely managed to work around the ban on European crude by diverting oil flows mainly to India and China, albeit at prices well below global crude prices.
However, given that China and India are significant fuel exporters and relatively small importers, it may be a different story regarding the rerouting of product exports.
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However, there are opportunities for Russian products to flow both to China, the world’s largest crude oil importer, and to India, the second largest oil importer in Asia.
Some Chinese oil refineries process fuel oil into diesel and gasoline has the opportunity to turn into high-value products, and if Russian cargo at a fairly cheap price offer If possible, there are opportunities to increase this trade.
China’s imports of Russian fuel oil are expected to hit a record high in February, with commodity analysts Kpler tracking an increase of 5.62 million barrels from an all-time high of 3.89 million barrels in December.
India is also raising fuel oil imports from Russia after the attack on Ukraine, with Kpler producing 4.484 million barrels in January, the second-highest after October’s 4.88 million barrels and more than three times the 2021 average. 1.45 million barrels per month.
India has also turned to Russian naphtha, with chemical crude inventories expected to hit a record high of 1.49 million barrels in February.
India rarely bought Russian naphtha before the war in Ukraine, but has been buying more since September last year.
Outside of Asia’s big heavyweights, Russia has some scope to increase its oil shipments, with product-importing countries such as Indonesia, Pakistan and Bangladesh as possible targets, although there are no signs of any flow to these buyers yet.
SAUDI, EMIRATES
Coverage for Russian products offer Another region that does is the Middle East, where the United Arab Emirates (UAE) and Saudi Arabia are increasing their imports.
According to Kpler, the UAE is expected to import 3.0 million barrels of Russian fuel oil in February and 4.34 million barrels in March, which was 750 thousand barrels in February last year.
Saudi Arabia’s import of Russian fuel oil is expected to reach 1.98 million barrels in February from 370,000 barrels in the same month last year.
Both Saudi Arabia and the UAE can use Russian fuel oil to replace crude oil in the direct combustion process for power generation.
This has the advantage of freeing up higher value domestic crude for processing at refineries for export or for export as fuel.
The UAE is expected to export 5.69 million barrels of diesel in February, the highest figure in five months, followed by Europe at 4.36 million barrels, Asia at 650,000 barrels and Africa at 690,000 barrels.
In February 2022, the UAE exported 5.47 million barrels of diesel, but Europe took only 1.91 million barrels, Asian countries took 900,000 barrels, and African countries took 1.82 million barrels.
Such changes in product flows around the world are likely to continue as traders, processors and consumers adjust to Europe’s ban on imports of Russian products.
Like crude oil, this is likely to hold volumes, although Russia may struggle to offload all of its high-cost refined fuels, particularly diesel.
Questions remain as to how big a financial hit Moscow will be from lower product export revenues, but it appears that the biggest beneficiaries of the product ban will be refineries that can buy cheap Russian fuel oil and petroleum products. naphtha and processes them into higher value products.
The views expressed here are those of the author, a Reuters columnist.
by Clyde Russell; Edited by Christopher Cushing
Our standards: Thomson Reuters Trust Principles.
The opinions expressed are those of the author. These are Confidence In accordance with its principles of integrity, independence and impartiality free does not reflect the views of Reuters News, which is committed to being Clyde Russell
2023-02-16 07:14:37
Source – reuters
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