Russia Witnesses Decline in Diesel and Fuel Exports in August

In the month of August, Russia's exports of diesel and fuel experienced a notable decline, hitting a point not seen in 10 months. This decrease is attributed to the routine seasonal maintenance that oil refineries undertake during this period, which historically leads to reduced demand.

Russia's exports of oil products observed a dip to 2.3 million barrels per day (bpd) between August 1 and August 26. This figure reflects a decline of 250,000 bpd compared to the previous month and also falls below the levels recorded in August 2022. It is worth noting that Russia has refrained from sharing official data due to the classification of its information subsequent to Western sanctions.

Although oil product exports from Russia have faced a decline, certain information highlight a distinct pattern in the case of crude oil exports. These exports, transported via sea, have actually surged to an 8-week high during this period.

Specifically, the exports of diesel and gasoil dwindled to 1.05 million bpd within the initial 26 days of August. Concurrently, the exports of gasoline and blending components reached a mere 80,000 bpd, marking the lowest level in nearly a year. In contrast, the exports of jet fuel have witnessed a rise to 40,000 bpd over the course of August. Notably, fuel oil exports—constituting a significant one-third of all fuel flows from Russia—decreased to 603,000 bpd during the same month. This is a substantial reduction, particularly in terms of flows to the Middle East. For fuel oil, this export level represents the lowest point in well over a year.

The contrasting data for August stands in stark juxtaposition to the positive statistics from July. In the preceding month, Russia's diesel and gasoil exports via sea had increased by 5% in comparison to June. This uptick was attributed to more refining capacity in Russia being available as seasonal maintenance activities concluded. Trade sources and vessel tracking corroborated this information. Notably, in light of an embargo imposed by the European Union on such imports on February 5, Turkey, North Africa, Brazil, and the Middle East have emerged as crucial markets for Russia's seaborne diesel exports.

It's noteworthy that Russia continues to defy Western sanctions, with certain refined oil products trading above the capped price established by the Group of Seven (G7). This underscores the nation's ongoing efforts to navigate the challenging landscape posed by these sanctions.

In conclusion, August marked a significant decline in Russia's diesel and fuel exports, attributed to routine maintenance that curtailed demand. Despite the sanctions, Russia's persistence in trading refined oil products at prices above G7 caps highlights the nation's determination to navigate the complexities of the global economic landscape.