India and China emerged as the main destinations for Russian exports of marine fuel oil and vacuum gas oil (VGO) in May.
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Traders and LSEG data have indicated a significant increase in these exports, reflecting changes in global trade patterns following the European Union’s embargo on Russian oil products.
Increase in Russian exports of fuel oil and VGO
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Russian exports of fuel oil and VGO by sea have seen a notable increase of 12% since April, reaching around 4 million tonnes in May.
This increase was partly due to the completion of seasonal maintenance, which allowed for increased production and export volumes.
The EU’s full embargo on Russian petroleum products, effective since February 2023, has redirected the majority of Russian fuel oil and VGO to Asian markets, predominantly India and China.
Increase in shipments to India and China
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In May, direct shipments of fuel oil and VGO from Russian ports to India increased to 0.7 million tonnes, compared to 0.6 million tonnes in April.
According to Reuters calculations and LSEG data, Russian fuel oil shipments to China rose to about 520,000 tonnes, up from 450,000 tonnes a month earlier.
These figures highlight India and China’s growing dependence on Russian petroleum products for their refining needs.
Strategic import choices by India and China
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Both India and China import straight-run fuel oil and VGO for refining purposes, which helps partially replace the more expensive Ural barrels. This strategic shift allows these countries to manage refining costs more effectively while ensuring a steady supply of needed petroleum products.
The redirection of Russian oil exports to Asia highlights the changing dynamics of the global energy market, driven by geopolitical shifts and economic considerations.
The increase in Russian fuel oil and VGO exports to India and China in May reflects the broader impact of the EU embargo and the resulting reconfiguration of global oil trade routes.
As these Asian giants continue to adjust their import strategies, the global oil market is likely to see further changes in trading patterns and supply chains.
This article was translated from English with the help of AI tools, and subsequently proofread by a local translator.
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