In May 2023, India and China emerged as the top destinations for Russian seaborne fuel oil and vacuum gasoil (VGO) exports, according to traders and data from the London Stock Exchange Group (LSEG).
Russian fuel oil and VGO seaborne exports rose 12% from April, reaching around 4 million metric tons, aided by the completion of seasonal maintenance. This came as the European Union’s full embargo on Russian oil products went into effect in February 2023, resulting in the bulk of Russia’s fuel oil and VGO being redirected to other regions, primarily in Asia.
Direct fuel oil and VGO shipments from Russian ports to India increased to 0.7 million tons in May, up from 0.6 million tons the previous month. Meanwhile, Russian fuel oil loadings to China rose to about 520,000 tons from 450,000 tons in April, according to Reuters calculations and LSEG data.
China and India are importing straight-run fuel oil and VGO for refining, partially replacing more expensive Urals barrels, according to traders. Additionally, dirty oil products supplies to Saudi Arabia from Russian ports in May doubled month-on-month to 430,000 tons, as traders buy fuel oil for power generation during the hot summer season.
However, Russian fuel oil loadings to the Ain Sukhna Terminal in Egypt fell last month to 200,000 tons from almost 500,000 tons in April, LSEG data shows. VGO and fuel oil loadings from Russia to Malaysia rose to 320,000 tons from 190,000 tons in April, while dirty oil products to Fujairah fell to 90,000 tons from 60,000 tons.
Approximately 450,000 tons of VGO and fuel oil loaded in Russian ports in May were destined for ship-to-ship loadings near Greece and Malta, with most of these cargoes expected to end up in Asia, according to market sources.