Russia’s refined fuel exports are on course to slump to a 15-month low, amid strong domestic demand for road fuels and as some products exceeded Group of Seven price caps.
The country shipped 2.24 million barrels of oil products a day in the first 20 days in August, down 14% from July’s total, according to Vortexa Ltd. data compiled by Bloomberg. That’s the lowest since May 2022 and about 5% below year-earlier levels, when Europe was still the biggest market for Russian fuels.
Russian exports are being closely watched for clues on its crude output since Moscow decided to withhold official data. To aid local supplies, the government has recommended oil producers to redirect gasoline and diesel from exports to the domestic market. At the same time, several Russian refined fuels have breached price caps imposed by the G-7, complicating traders’ access to shipping services and insurance.
Oil product flows have also declined this month despite elevated crude-processing rates in the first half of August. Russian crude exports have dropped the lowest since January after an unexplained slowdown at its Black Sea port of Novorossiysk, along with its pledged production cuts.
“Currently we are still in the peak demand season within Russia,” said David Wech, chief economist at Vortexa.
Here’s a breakdown of Russia’s seaborne fuel exports from its western and eastern ports for the Aug. 1-20 period, according to the Vortexa data compiled by Bloomberg as of Thursday:
Diesel and gasoil shipments — which account for about 45% of Russian petroleum exports — dropped to just below 1 million barrels a day in observed data, the lowest since May. Flows to most regions shrunk — except to Africa, where exports to Libya held up. Gasoline and blending component flows fell 43% to 66,000 barrels a day.
Naphtha exports have dropped to 371,000 barrels a day, down 22% from levels observed for the same month last year, with a big slide in cargoes heading to Asia and the Middle East. Jet fuel flows inched higher to almost 30,000 barrels a day.
Fuel oil flows, which make up almost a third of overall product exports, have plunged to just 624,000 barrels a day. That’s the lowest since March 2022, when the US — then the top buyer of the product — banned Russian oil imports following Moscow’s invasion of Ukraine.
Reduced exports of low-value products like fuel oil and naphtha that are capped at $45 per barrel “raise the question whether Russian players may struggle to find vessels,” Wech said. Russia may also be “temporarily deprioritising these exports, as they have done similarly in the months after the war started,” he said.
Exports of refinery feedstocks like vacuum gasoil continued July’s rebound, with 148,000 barrels a day shipped so far.
Shipment volumes are likely to be revised as new cargoes are observed for the rest of the month.
