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According to Reuters, as refineries completed their scheduled maintenance, Russia ramped up its fuel exports via sea in July, with the majority destined for China and Saudi Arabia.
Reuters data also showed that total shipments of Russian fuel oil and vacuum gas oil (VGO) rose 7% from the previous month to 4 million tons in July.
Of this, China and Saudi Arabia each imported 700,000 tons, with exports to China increasing by 18% compared to June, and exports to Saudi Arabia nearly doubling in July from the previous month.
Saudi Arabia, rather than China or India, emerged as a significant importer of Russian fuel in July. This was due to the kingdom’s increased fuel needs for power generation during the hot summer months, with peak electricity consumption and soaring air conditioning demand.
As the world’s second-largest producer and the top OPEC producer, Saudi Arabia is verified to hold approximately 267 billion barrels of crude oil reserves. The country produced over 9 million barrels per day in 2021, increasing to 11.5 million barrels per day in 2022, but recently cut back by half a million barrels per day in the latest OPEC+ output reduction.
Saudi Arabia plans to expand its production capacity to 13 million barrels per day by 2027. However, some analysts have warned that the kingdom is approaching its peak oil output.
According to shipping data cited by Reuters, some of the exported Russian fuel oil and VGO witnessed ship-to-ship transfers off the coasts of Malta and Greece, with most STS cargoes heading towards Asia.
Russia has shifted its focus to Asia for crude oil and petroleum product exports via sea after Western sanctions on Russian oil imports following the conflict with Ukraine.
As Russia’s crude oil and fuel exports to Asia increased, so did the volume of Russian fuel exports to Asia via Africa.
According to LSEG shipping data reported by Reuters, exports of Russian oil products to Asia via the Cape of Good Hope nearly doubled in July from the previous month to an all-time high.
Since late 2023, many shipowners and charterers have opted for the longer route via Africa to avoid the Red Sea, where vessels flying Western or Israeli flags or owned by Western or Israeli entities have faced threats.
According to Oilprice
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