India and Saudi Arabia were the top destinations for Russian seaborne fuel oil and vacuum gasoil (VGO) exports in October, traders said and LSEG data showed.
Total fuel oil and VGO exports from Russian ports last month declined by 3% from September to about 4.15 million metric tons, according to Reuters calculations based on LSEG data.
Since the European Union’s full embargo on Russian oil products went into effect in February 2023, Asian countries became the main destination for Russia’s fuel oil and VGO supplies.
Direct fuel oil and VGO shipments from Russian ports to Saudi Arabia declined in October by 9% month-on-month to 0.65 million tons on falling demand as summer heat was over.
Russian fuel oil and VGO loadings to India rose last month by 56% to around 0.51 million tons, while dark oil products supplies from Russian ports to China decreased by 35% to 0.47 million tons.
China and India import straight-run fuel oil and VGO as cheaper alternative to Urals crude oil in their refinery feedstock pool, according to market sources.
Meanwhile China is planning a tax revamp that would raise costs and could slow demand on imported fuel oil.
The revamp would further pressure China’s independent refiners, known as teapots, that typically use fuel oil as an alternative to crude oil feedstock for processing.
Tankers with around 0.5 million tons of heavy oil products from Russian ports are on their way signalling Singapore as destination, but some of those cargoes could end up also in China.
Singapore is the world’s largest bunkering hub, and tankers often use it as waypoint on a long route to Chinese ports.
Russia in October sent around 220,000 tons of fuel oil to the United Arab Emirates’ Fujairah, the world’s third-largest bunker port, shipping data showed.
Nearly 200,000 tons of VGO and fuel oil loaded in Russian ports in October went for ship-to-ship loadings near Greek islands. Most of those cargoes are destined for Asia, according to the market sources.
All the shipping data above are based on the date of cargo departure.
(Reporting by Reuters; Editing by Alison Williams)
