Russian Fuel Oil Heading East as EU Embargo Takes Effect

Foreign News reported on February 6 that the EU's comprehensive embargo on Russian refined oil came into effect on February 5, but data from traders showed that most of the Russian fuel oil and VGO had been shipped to other regions, mainly Asia.

In January, less than 5% of Russian fuel oil and VGO were shipped to European countries, including about 100,000 mt to Agioi Theodoroi in Greece, about 80,000 mt to Latvian port in Ventspils and 30,000 mt to Italian port of Augusta.

In response to the Russia-Ukraine conflict, the EU began restricting the import and transit of some fuel oil from Russia six months ago, under customs code 2707, with a blanket ban coming into effect this month. The Group of Seven (G7) has also imposed price caps on Russian fuel shipments.

In response, traders have shipped cargoes to Asia and the Middle East and are increasingly using ship-to-ship (STS) loading to transport oil.

In December 2022 and January 2023, the total export volume of Russian fuel oil and VGO was about 4.2-4.5 million mt per month.

Data showed that Russia exported more than 800,000 mt of fuel oil to India in December 2022, and India purchased refined oil for processing in domestic refineries. In January 2023, Russian fuel oil shipments to India will be at least 500,000 mt.

STS loads near Kalamata port in Greek, one of the main destinations for Russian fuel oil and VGO exports, soared to 8.2 million mt in 2022, higher than 1.4 million mt in 2021.

In January 2023, Russia shipped 500,000 mt of dirty oil products by STS near Kalamata. Traders also use STS loading in Skagen (Denmark) and Ceuta (Spain).

There were also large-scale transfers of Russian fuel oil and VGO to Singapore, Malaysia, China, the United Arab Emirates, Turkey, Senegal and South Korea last year, the data showed.