China and Saudi Arabia top buyers of Russian fuel oil in July
China and Saudi Arabia emerged as the top destinations for Russian seaborne fuel oil and vacuum gasoil (VGO) exports in July, according to reports. The country’s fuel oil and VGO exports by sea increased by 7% from June, reaching approximately 4.05 million metric tons, driven by the completion of seasonal maintenance at Russian refineries.
Russia’s offline primary oil refining capacity for July was estimated at 2.5 million tons, a decrease of about 44% from June, based on Reuters calculations.
Since the European Union’s complete ban on Russian oil products took effect in February 2023, Asian countries have become the primary market for Russia’s fuel oil and VGO supplies. In July, direct fuel oil and VGO shipments from Russian ports to China rose by 18% month-on-month to 0.7 million tons. China imports straight-run fuel oil and VGO for refining feedstock, often blending it with Urals crude oil.
Meanwhile, shipments to Saudi Arabia nearly doubled from June to 0.7 million tons, largely intended for power generation plants during the peak summer season when power consumption is at its highest, said reports.
In contrast, Russian fuel oil and VGO supplies to India decreased by 7% in July to 0.48 million tons. According to shipping data, fuel oil and VGO exports to South Korea from Russian Pacific ports increased to 118,000 tons from 36,200 tons in June. Around 295,000 tons of VGO and fuel oil loaded at Russian ports in July were transferred through ship-to-ship loadings near Greece and Malta, with most of these cargoes eventually destined for Asia, according to market sources.
Additionally, India, the world’s third-largest oil importer, maintained its position as Russia’s second-largest crude buyer in July, with imports totalling $2.8 billion, according to reports attributing the latest monthly data from the Centre for Research on Energy and Clean Air (CREA).
According to CREA’s analysis India was the second-largest purchaser of Russian fossil fuels last month, with nearly 80% of its imports from Russia consisting of crude oil, valued at $2.8 billion (2.6 billion euros).
China led the way, accounting for 47% of Russia’s crude oil exports in July, followed by India with 37%, the EU with 7%, and Turkey with 6%. Additionally, India was the second-largest buyer of Russian coal, acquiring 18% of Russia’s coal exports, second only to China, which purchased 45% of the coal exported by Russia.
Several of India’s private refiners have already secured long-term agreements to purchase Russian oil. Among them are Nayara Energy, in which Russian oil giant Rosneft holds a stake, and Reliance Industries, which operates the Jamnagar refinery, the world’s largest and most complex single-site refinery.
Earlier this year, India’s Reliance Industries signed a one-year agreement with Rosneft to purchase at least two cargoes of Urals crude per month, with payments made in Russian rubles.
For the second consecutive fiscal year, Russia emerged as India’s largest oil supplier, as a surge in the country’s crude imports significantly reduced the share of OPEC and Middle Eastern oil in India’s supply to a record low.
