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Russia started exporting diesel to Saudi Arabia—its ally in the OPEC+ group—in February, after Moscow’s key fuel export outlet, the EU, enacted an embargo on seaborne imports of Russian oil products on February 5, Reuters reported on Tuesday, quoting traders and ship-tracking data.
Ahead of the EU ban on Russian petroleum products, Russia began to divert its oil product cargoes to North Africa and Asia, while Europe is ramping up imports of diesel from the Middle East and Asia to offset the loss of Russian barrels, of which it imported around 600,000 barrels per day (bpd) before the February 5 embargo took effect.
Now, according to Refnitiv data cited by Reuters, at least three cargoes carrying 190,000 tons of diesel loaded in the Russian Baltic port of Primorsk in February and were headed to deliver the fuel to Saudi Arabia.
According to traders who spoke to Reuters, the Saudis could export part of the Russian diesel to other countries after some refining.
In February, Europe was on track to import the highest volumes of diesel from the Middle East and Asia in seven years as the EU turned to alternative supply after the ban on Russian imports. Just before the fuel embargo, Europe was buying more diesel from the United States and Saudi Arabia, yet Europe still remained the biggest buyer of Russian diesel in January.
Estimates by S&P Global cited by BNE IntelliNews showed last week that Russia’s oil product exports dipped by 20% in February, hitting the lowest level since May last year.
Russia has said it would reduce its oil production by 500,000 bpd this month in response to the Western sanctions, a move that may affect the level of its oil and fuel exports.
According to JP Morgan, Russian fuel exports could slip by 300,000 bpd as a result of the EU embargo, but the bank added Russia could maintain production of crude oil at pre-war levels. It would be harder, however, to return to pre-pandemic levels of production, JP Morgan also said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com