Russian oil companies sharply increased maritime exports of diesel fuel in the first two weeks of December

According to Kommersant’s information, in the first two weeks of December, Russian oil companies sharply increased seaborne exports of diesel fuel, which as a result recovered to the level of 1 million barrels per day. This became possible thanks to the almost complete lifting of the export embargo, which was introduced at the end of September. Turkey, the largest buyer of Russian diesel fuel and hit hardest by the embargo, is still restoring its previous level of imports. Second place in terms of supply volumes is held by Brazil, which has been increasing imports from the Russian Federation for the third month in a row.

In the first weeks of December, the Russian Federation restored maritime exports of diesel fuel to the level of 1 million barrels per day (b/d), according to Kpler data (available to Kommersant). This is the highest figure since August 2023. Russian oil companies were able to significantly increase supplies of diesel fuel in the first month of winter thanks to the lifting of export restrictions.

Due to a significant increase in fuel prices, the Russian authorities introduced an embargo on the export of gasoline and diesel fuel from September 21. As a result, tanker supplies of diesel fuel decreased to 740 thousand b/d in September. But just two weeks later, the export ban for diesel fuel, which is sent to ports by pipeline, was lifted, since maintaining a complete export ban threatened the refineries with overstocking and a decrease in oil refining. In October, maritime exports of diesel fuel increased slightly – to 768 thousand bpd.

In the first half of November, the Russian Federation lifted the embargo on the export of gasoline, and at the end of the month – on the export of summer diesel fuel. According to Kpler, seaborne exports increased to an average of more than 800 thousand b/d in November. Winter diesel fuel, for which demand increases within Russia during the cold season, was not removed from the ban. In November, its quotation on St. Petersburg International Exchange exceeded 75 thousand rubles. per ton. However, by mid-December, as output grew, prices began to decline: on December 14, wholesale quantities at St. Petersburg International Trading Exchange fell by 3%, to 69.8 thousand rubles. per ton. Overall, the economics of petroleum product exports deteriorated slightly in December due to a stronger ruble amid lower global oil prices, as well as increased damper payments to oil companies for supplies to the domestic market.

Once the largest importer of Russian diesel fuel, Turkey, which was hit hardest by the export ban, increased supplies of Russian diesel fuel in December to 319 thousand bpd. In October, Turkey’s purchases of Russian diesel fuel fell to the lowest level this year – 212 thousand bpd.

The second largest importer, Brazil, has been increasing purchases for the third month in a row, which in December almost reached 274 thousand bpd and may break another record by the end of the month. Diesel fuel supplies to Algeria increased to 74 thousand b/d, although previously the country imported a little more than 4 thousand b/d. Turkey and Brazil have become leaders in the import of Russian diesel fuel this year, which is due to the refusal of EU countries to purchase Russian fuel due to sanctions against the Russian Federation for the start of hostilities in Ukraine. Thus, on February 5 this year, the EU embargo on the purchase of Russian fuel, as well as a price ceiling for it, came into force.

Gasoil exports were only slightly affected by the embargo, so the December recovery in exports was primarily driven by low-sulfur diesel, notes Kpler’s Victor Katona. The analyst recalls that the ban on diesel fuel exports in September-October had a significant impact on Turkey, however, a restoration of previous flows is also observed in the Turkish direction. According to his estimates, export dynamics will remain at about 1 million bpd, but will hardly come close to the record of March this year (1.26 million bpd), primarily due to the sudden decrease in oil refining rates in the first half of December. The expert reminds that Russia needs to adhere to the OPEC+ agreements, which relate to reducing supplies abroad not only of oil, but also of petroleum products.

Dmitry Kozlov