Russian diesel imports to Europe fall, but remain dominant

A Russian state flag flies atop a diesel plant in the Yarakta oil field, owned by Irkutsk Oil Company (INK), in Irkutsk region, Russia March 10, 2019. REUTERS/Vasily Fedosenko

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  • Russia’s imports fall in April – data
  • Imports from Asia, the Middle East and the United States are expected to increase sharply
  • Traders buy Russian oil ahead of May 15 deadline
  • The European Union is preparing new sanctions against Russia

LONDON, April 27 (Reuters) – European diesel imports from Russia are expected to fall in April but will still overtake those from other regions, underscoring the challenge European governments face as they consider new oil sanctions Russian.

Diesel deliveries from Asia, the Middle East and the United States are expected to hit their highest level in nearly three years in April, according to data from oil analyst firm Vortexa, as traders scramble to replenish dwindling stocks and gradually reduce the region’s dependence on Russian oil. .

Although European Union sanctions have so far avoided targeting oil from Russia, its main supplier, many traders and refiners have opted to reduce their purchases of Russian crude and refined products in recent months. Read more

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As EU officials prepare a sixth sanctions package against Russia, they are weighing the costs of replacing Russian oil with imports from other suppliers. Read more

Germany hopes to find a way within days to replace Russian oil with supplies from other sources, Economy Minister Robert Habeck said on Tuesday. Read more

Concerns over Russian supplies have led to a sharp drop in European diesel stocks in recent weeks. Stocks in the Amsterdam-Rotterdam-Antwerp hub are at their lowest since 2008, according to data from Dutch consultancy Insights Global.

With domestic diesel production in Europe falling short of the region’s consumption, traders reacted quickly to rising prices, booking dozens of tankers from around the world to Europe.

Combined imports from Asia, the Middle East and the United States are forecast to reach 760,000 barrels per day (bpd) in April, their highest level since August 2019, according to data from Vortexa.

Meanwhile, diesel imports from Russia are forecast to hit 770,000 bpd, their lowest since December, and well below the record of more than 1 million in April 2021, the data showed.

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Profit margins at European refineries converting crude oil to diesel hit an all-time high immediately after Moscow’s February 24 invasion of Ukraine began.

The high imports are the combined result of maintenance at refineries in Europe and increased output from large refineries in India that are capitalizing on big profit margins and cheap Russian crude, said Janiv Shah, an analyst at the firm of Rystad Energy consultancy.

Diesel imports from Russia are mainly shipped from Baltic ports, including Primorsk, to the ARA storage center, where they can be mixed with fuel from other origins, a trader said.

Some traders are also buying more Russian diesel ahead of the EU’s May 15 deadline limiting oil purchases from major Russian oil producers to the amount “strictly necessary” for Europe’s energy security, traders said. Read more

But they said European diesel imports for May remain weak so far.

Europe is the destination of almost half of Russian exports of crude oil and petroleum products, according to the International Energy Agency (IEA).

Cutting Russian oil will be difficult and costly as Europe will have to compete for fuel further and pay higher transport costs, a trader said.

“Technically, if Europe pays a premium of $100, they can get rid of Russian oil,” said a trader on condition of anonymity.

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Reporting by Ahmad Ghaddar and Ron Bousso; edited by Barbara Lewis

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