US and European sanctions have led to a significant shift in the direction of Russian energy flows.
Bloomberg reports diesel and other fuel products shunned by many countries in the West are heading to the Middle East. Increasing flows began after the Russian invasion of Ukraine and reached 155,000 barrels a day in June, according to new data from Vortexa Ltd. Meanwhile, European imports have slumped 30% since the invasion on Feb. 24.
Vortexa's data shows most of the products arriving in the Middle East from Russian ports are fuel oil, diesel/gasoil, and more recently, jet fuel and kerosene.
"Most of the Middle East's imports from Russia are of fuel oil -- a leftover from the refining process and often used in power generation and shipping," Bloomberg noted.
About a third of the inflows of fuel products went into the Fujairah Oil Terminal for storage in the United Arab Emirates. Imports of Russian fuel products are at a 2016 high and could increase further because of Western trade restrictions to punish President Putin for the invasion of Ukraine.
However, Koen Wessels, senior oil products analyst at Energy Aspects Ltd, said Russian flows to the Middle East will be temporary and could eventually slow because of shipping insurance-related restrictions for vessels leaving Russian ports.
Vortexa's data shows July's imports are on track to surpass June's figures. Already, inflows are around 220,000 barrels a day for July 1-11.
Besides the Middle East, the Visual Capitalist shows the top countries in the first 100 days (Feb. 24 to June 4) purchasing crude, oil products, pipeline gas, LNG, and coal. China was the top importer of Russian oil in the world.
The world is still desperate for Russian energy supplies, and flows are shifting to the East.
JPM's commodity desk noted earlier this week that if Russia cuts energy exports, Brent prices could significantly jump and spark even more economic turmoil.
By Zerohedge.com
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Comments
Despite Western sanctions, Russia is having so many buyers around the world from China to India and the Middle East competing to buy its crude and petroleum products and thus neutralizing the sanctions against it. It is the Europeans and Western countries who are paying staggering energy bills while Russia is raking in cash.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London