India and China Lead as Top Destinations for Russian Fuel Oil Exports

In May, Indian and Chinese markets emerged as significant destinations for Russian seaborne exports of fuel oil and vacuum gasoil (VGO), according to traders and data from LSEG (London Stock Exchange Group). These exports totaled approximately 4 million metric tons, marking a 12% increase from April, supported by the completion of seasonal maintenance activities.

For India, direct shipments of fuel oil and VGO from Russian ports increased to 0.7 million tons in May from 0.6 million tons in April. Similarly, China saw an uptick in Russian fuel oil loadings to about 520,000 tons compared to 450,000 tons in April, based on Reuters calculations and LSEG data.

Both countries import straight-run fuel oil and VGO primarily for refining purposes, which helps partially offset more expensive Urals crude oil barrels, as noted by traders.

Elsewhere, Saudi Arabia's imports of dirty oil products from Russian ports doubled month-on-month to 430,000 tons in May. This increase is attributed to the demand for fuel oil for power generation during the hot summer season.

Conversely, fuel oil loadings to the Ain Sukhna Terminal in Egypt decreased to 200,000 tons in May from nearly 500,000 tons in April, based on LSEG data. Meanwhile, shipments to Malaysia rose to 320,000 tons from 190,000 tons in April, while deliveries to Fujairah declined to 90,000 tons from 60,000 tons.

Additionally, around 450,000 tons of VGO and fuel oil loaded in Russian ports in May were destined for ship-to-ship transfers near Greece and Malta, with a significant portion eventually making its way to Asian markets, according to market sources.

These trends underscore the evolving dynamics of global oil product flows amid geopolitical shifts and market demands, particularly in Asia, which continues to be a key destination for Russian energy exports.