Russia’s Fuel Oil
In July, Russia significantly increased its seaborne exports of fuel oil following the completion of maintenance at many of its refineries.
According to Reuters, citing data from LSEG, a substantial portion of these exports was directed towards China and Saudi Arabia, which emerged as the leading buyers of Russian fuel oil.
The total volume of Russian fuel oil and vacuum gasoil (VGO) shipments rose by 7% month-on-month in July, reaching 4 million metric tons.
Among this total, both China and Saudi Arabia imported 700,000 tons each. Exports to China saw an 18% increase from June, while shipments to Saudi Arabia nearly doubled compared to the previous month.
Saudi Arabia, in particular, has a high demand for fuel oil during the summer months due to increased electricity consumption driven by the need for air conditioning.
Additionally, some of the Russian fuel oil and VGO exports were transferred between ships or loaded onto other vessels off the coasts of Malta and Greece.
Shipping data indicates that the majority of these ship-to-ship (STS) transfers are destined for Asia.
Following the European Union and Western embargoes on Russian petroleum products imposed after President Vladimir Putin’s invasion of Ukraine, Russia has redirected its seaborne oil and petroleum exports towards Asian markets.
This shift has not only led to increased direct shipments to Asia but has also boosted the volume of Russian fuel exports transported via Africa.
In July, the volume of Russian petroleum products shipped to Asia via the Cape of Good Hope nearly doubled from the previous month, reaching an all-time high, according to LSEG shipping data.
Since late 2023, many ship owners and vessel charterers have opted for the longer route around Africa to avoid passing through the Red Sea, where vessels flagged by Western and Israeli interests have been targeted by the Iran-aligned Houthis.
Although Russia itself is not a direct target, the increased risk associated with the Red Sea route has led many to choose the more secure alternative of traveling around Africa.
This route not only circumvents potential hazards but also reflects the broader adjustments in global shipping patterns in response to geopolitical tensions.
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