Moscow tended to replace the Middle East region with European destinations in an attempt to search for new customers for oil derivatives, especially Russian diesel, after the embargo entered into force on February 5 (2023).
It appears that the Kingdom of Saudi Arabia is on its way to receive shipments of diesel from Russia, and is expected to re-export it to various destinations, according to information from the specialized energy platform, quoting Reuters.
Traders said that Russia began exporting diesel to Saudi Arabia during the month of February (2023), as part of its efforts to address the European embargo.
Shipments of Russian diesel are heading to Saudi Arabia
The European Union’s comprehensive embargo on Russian oil derivatives began on February 5 (2023), prompting Russian exporters to redirect shipments to the African continent and Asia, in addition to ship-to-ship operations.
Refinitiv data showed that the Russian port of Primorsk on the Baltic Sea witnessed the loading of at least 3 shipments of about 190 thousand tons of diesel during the month of February.
The data revealed that the 3 tankers are on their way to the Kingdom of Saudi Arabia, noting that the tanker Serini, which carries 66,000 tons of Russian diesel, will head to the port of Jeddah for unloading, while the port of Ras Al-Tanura will receive the tankers “Apanimo” and “Zaria”.
Traders indicated that Saudi Arabia may re-export Russian diesel to other destinations, after carrying out some refining operations.
It is noteworthy that the Kingdom exports huge quantities of oil derivatives to Asian markets, but it has begun planning to direct part of its exports to Western countries.
Saudi oil derivatives exports in 2021 are estimated at 1.344 million barrels per day, up from 32.2% on an annual basis, recording the highest level since 2018, when it reached 1.971 million barrels per day, according to OPEC’s annual report.
According to preliminary estimates, Saudi oil exports of crude and derivatives are expected to exceed 7 million barrels per day in 2022, according to the Energy Research Unit.
The following graph – prepared by the specialized energy platform – shows diesel exports from the Middle East to Europe during the period from January to September 20 (2022):
Find new markets
After the West avoided Russian supplies, Moscow was able to conquer new markets through a fleet of shadow tankers unfettered by Western sanctions, and it succeeded to a large extent in its evasion method to enhance exports to various countries around the world.
Brazil was among these countries, as shipments of Russian low-sulphur diesel to the Latin American country recorded record levels during February (2023).
According to Refinitiv data, at least 4 shipments of 140,000 tons of Russian diesel are destined for Brazil.
The data showed that the Brazilian ports witnessed the unloading of two shipments carrying 60,000 tons of Russian diesel.
The total Russian diesel exports to Brazil during January (2023) amounted to approximately 96,000 tons.
During the past year (2022), Brazilian Foreign Minister Carlos France said that his country is looking forward to buying as much Russian diesel as possible.
Arab countries resort to Russian diesel
Russia has always been the main exporter of diesel to Europe, especially since European refineries do not produce enough fuel to meet the domestic demand for its huge fleet of diesel cars, but after the ban it sought to direct supplies to different markets.
Russia’s Black Sea ports are close to Turkey to boost diesel supplies, while exporters from the Baltic Sea port of Primorsk and Vysotsk resort to long-haul flights to replace European destinations, adding to freight costs.
Since the beginning of February (2023), Russia has been diverting huge amounts of diesel from Baltic ports to Morocco, Algeria, Ghana, Tunisia and Brazil.
According to data from the “Kpler” data analysis company, Tunisia imported nearly 77,000 barrels per day of Russian diesel and gas oil during the month of February (2023).
While Russian diesel exports to Morocco amounted to 735 thousand tons during the year 2022, and since the beginning of this year (2023), the total exports amounted to about 140 thousand tons.
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