Russia plans to raise key diesel exports
Flows from three major ports seen at 2.83 million tons and exports rebound as most fuel-export restrictions are lifted
Highlights:
- Flows from three major ports seen at 2.83 million tons
- Exports rebound as most fuel-export restrictions are lifted
Russia plans to boost overseas diesel supplies from its major western ports in December by over a quarter after the government eased further export restrictions and Black Sea storms pushed back November loadings of the fuel.
Shipments from main Russian ports on the Black and Baltic Seas, including some batches originating in Belarus, are earmarked at a total of 2.83 million tons for December, according to industry data seen by Bloomberg.
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That's around 681,000 barrels a day, or 28% higher than the nation exported last month, according to calculations based on historical data from intelligence firm Kpler. December flows would also be the highest monthly flow from the ports since July, the data show.
Russia, a key global supplier of diesel-type fuels, has been gradually returning the flows to the market after a short-term export ban that shocked the industry in late September. The rebound in the Russian supplies is coming as diesel's premium to crude oil is well above the seasonal norm, increasing the incentive to export the fuel.
"If the plan materialises in full, the growth will be driven by rebounding domestic oil-processing and lifting of key restrictions on diesel exports," said Viktor Katona, lead crude analyst at Kpler.
"Russia's November diesel flows from the Black Sea have also been affected by bad weather, its improvement is also expected to add a boost to the December supplies," he said.
Actual diesel shipments from the three Russian ports were lower in November compared with the monthly plan, according to Kpler data. Last month, storm alerts halted loadings in Novorossiysk for at least 17 days in total, according to the nation's oil-pipeline operator Transneft PJSC. That means some shipments may have been delayed to December.
The December plan seen by Bloomberg only shows shipments of diesel delivered to the three ports by pipeline. Smaller volumes may also be sent by rail. Actual flows may differ, depending on the weather and demand from foreign customers. Transneft, which compiles the loading schedules, declined to comment on the December export plan.
India boosts purchases of cheaper Russia, Iraq crude in November
India increased oil imports from Russia and Iraq last month as refiners maximised purchases of cheaper barrels to bolster margins and meet product demand, according to Kpler data.
Cargoes from Russia climbed 9.7% from October to 1.74 million barrels a day, while shipments from Iraq surged 22% to 1.03 million barrels a day, the highest level since May last year, according to data from the marketing intelligence provider. Imports from third-largest supplier Saudi Arabia contracted 26.8% to 646,510 barrels a day.
"In an environment when refinery margins even for the most complex refiners across Asia are $7-$8 per barrel, every penny of incremental profits counts," said Viktor Katona, lead crude analyst at Kpler.
Top refiner Indian Oil Corp. had gross refining margins of $13.12 a barrel on average in the six months through September, almost half those a year earlier. Overall oil imports by the world's third-largest consumer increased 4.4% in November from the previous month to 4.57 million barrels a day, the highest volume since July.
India's appetite for Russian crude will grow in December, but volumes will depend on availability as Moscow ramps up refinery runs after the completion of autumn maintenance, Katona said.
