Despite the price ceiling and embargo, the Russian Federation plans to increase exports of diesel fuel in February
Russia plans to increase exports of diesel fuel in February despite the entry into force of the European Union embargo on oil products and price restrictions on them by the G7.
It is reported Reuters citing own data analysis of traders and Refinitiv.
The total export of low-sulfur diesel fuel and gas oil from Russian Black Sea and Baltic ports is expected to increase in February by 5%-10% compared to January to 4.2-4.3 million tons. The Russian Federation has already increased supplies of diesel fuel to Turkey and Morocco in an attempt to redirect oil products ahead of the EU embargo.
It is important that the actual loading of Russian oil refineries with diesel fuel may be lower than planned. For example, stormy weather in the Black Sea ports of Novorossiysk and Tuapse could affect supply chain disruptions: rail congestion, warehouse overflows, and reduced processing at factories.
Russian refineries may also cut fuel production in response to the G7 price ceiling if their margins turn negative. Then the production of oil products “may decrease quickly and significantly”, – noted one of the traders in a Reuters comment.
The lack of available tankers is another limiting factor, traders said. The fleet of vessels that can carry petroleum products is smaller and more specific than oil vessels, which means that Russia will have fewer opportunities to supply diesel fuel.
We remind you:
The EU and the G7 agreed on Friday to introduce price ceiling for Russian petroleum products: $100 for Russian diesel and $45 for various oils.
The member states also gave a written commitment to revise the limit price for Russian crude oil in March. Now the price is $60.
