Diesel exports from Russia are breaking records, despite EU sanctions

Diesel exports from Russia should reach a record high this month, despite European Union sanctions that have deprived the country of its largest market. Diesel is being sold at deep discounts.

This was reported by Bloomberg.

Turkey, Morocco and other countries have increased purchases, although some cargoes from Russia are stored in floating storage facilities.

Diesel shipments from Russia in the first 19 days of March totaled about 1.5 million bpd, according to Vortexa Ltd. If this figure holds, this month will see the highest data exports since early 2016.

“Russia’s refinery runs remained high so far in March, which allowed robust diesel output,” said Mikhail Turukalov, an independent US-based oil-products analyst. “Domestic producers seem quite confident they can sell their volumes to foreign buyers — the discounts they offer are deep enough and there are new markets for the fuel.”

According to him, producers are quite confident that they they can sell their volumes to foreign buyers — "the discounts they offer are deep enough and there are new markets for the fuel".

However, the supply boom may not last long. Load plans for key Russian ports show a decrease in April compared to March schedules.

Most Russian diesel exports go to Turkey. Other importers include Morocco, Brazil, Tunisia and even the largest oil exporter Saudi Arabia.

But there’s also been a significant increase in the amount of diesel-type fuel from Russia held in floating storage since the EU’s import ban began — perhaps a sign that finding replacement customers is proving challenging, Bloomberg notes.

As a reminder, the embargo on imports of petroleum products from Russia to the EU countries came into force on February 5. At the same time, the price ceiling for diesel was set at 100 dollars per barrel.

Author – Anastasiya Glotova, 27/03/2022