Bloomberg: Russian oil is being blended with other grades in Singapore
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Singapore’s energy market participants see an increase in demand for oil storage tank rentals, reports Bloomberg. This trend is due to the fact that exporters mix cheap oil products from Russia with more expensive and non-sanctioned fuels in Singapore storage facilities, due to which they manage to bypass restrictions and increase profits.
William Tan, senior vice president of Singapore-based consulting firm Miyabi Industries, said traders and suppliers are leasing onshore tanks and floating offshore storage facilities in the city-state. In them, exporters mix cheap Russian fuel with other grades, with the help of which they get mixed fuel oil. Its sale, according to Mr. Tan’s calculations, brings market participants up to 20% profit (relative to 10-12% profit when selling fuel without impurities).
A representative of Miyabi Industries is confident that this trend has been observed since October 2022. According to an unnamed Bloomberg source at energy company Advario Asia Pacific Pte, the number of requests to store oil in Singaporean reservoirs grew until December last year.
Information from the shipping company Vortexa Ltd indicates that in December 2022, Singaporean terminals accepted twice as much volumes of Russian oil and fuel oil as a year earlier. It is expected that “blended” oil products will be re-exported to the markets of Northeast Asia.
The use of Singapore as a hub for Russian energy resources became possible due to the peculiarities of the local sanctions legislation. Although the Singaporean authorities banned the island financial institutions from conducting transactions with Russian legal entities, the government of the country did not impose a ban on the import of Russian energy resources.
On the decline in oil exports from Russia against the backdrop of sanctions – in the material “Kommersant” “Oil gets stuck in pipes”.
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