Russia may step up fuel exports to Asia as EU curbs tighten

Russia may try to push greater volumes of a key oil product into Asia, possibly blending some with crude oil, in a bid to find alternative markets as European sanctions tighten, according to FGE.

More Russian-made naphtha — a fuel primarily used to make plastics — is likely to head into hubs such as Singapore and Fujairah from February when EU sanctions kick in, said Armaan Ashraf, global head of natural gas liquids at the consultancy. Re-exports from these regions could become common as some buyers shy away from direct imports from Russia, he said in an interview.

Moscow’s invasion of Ukraine has caused turmoil across energy markets this year, and that disruption is set to extend into 2023. A European Union ban on most flows of Russian crude will start in December, followed by a similar move against products including naphtha about two months later. While the Energy Information Administration expects Russian crude output will drop as a result of the curbs, local refineries will still need to find outlets for their naphtha.

Russian naphtha exports to Asia rose 84 per cent in August to about 130,000 barrels a day compared with all of July, according to preliminary data by Vortexa Ltd. 

© 2022 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.