According to traders and shipping data, Russia has been sending its surplus ultra-low sulphur diesel from its ports for storage in the regional hub of Singapore and in West Africa, as ample supply has slowed demand.
Since the full EU embargo on importing Russian oil products took effect in February 2023, Russia has diverted its diesel exports from Europe to Brazil, Turkey, and various parts of Africa and Asia.
Shipping data shows that several vessels have been loaded with diesel in the Russian Baltic ports of Primorsk and Saint Petersburg, and are now heading to Singapore or Malaysia for storage. For example, the Aether loaded about 100,000 metric tons of diesel in May and reached Singapore last week, while the Advantage Portofino and the Minerva Aries loaded a combined 167,000-169,000 tons in June.
Additionally, Russia has increased diesel supplies to Togo in West Africa, with about 66,000 tons already loaded onto the VLCC the Monaco Loyalty for regional storage off Togo.
Traders cited lower demand in Turkey and a lack of demand in markets west of the Suez Canal as reasons for this flow of Russian diesel to Asia and Africa. The stored diesel could see increased demand in August when Indian refineries begin their maintenance season, as Togo typically imports 140,000-300,000 tons of ultra-low sulphur diesel per month from India.
This diversion of Russian diesel exports to storage hubs in Singapore and Africa highlights the challenges Russia is facing in finding new markets for its oil products after the EU embargo, as well as the global dynamics of supply and demand for refined fuels.