India and Egypt were primary destinations for Russian seaborne fuel oil and vacuum gasoil (VGO) exports in April, Reuters reported citing LSEG data and traders. Overall, Russian fuel oil and VGO seaborne exports saw a 10 per cent decline in April compared to the previous month, totaling around 3.32 million tons. This drop was attributed to refining capacity being sidelined due to maintenance, technical issues, and drone attacks. However, there was a 13.6 per cent increase in exports from March. Since the European Union (EU) implemented a complete embargo on Russian oil products in February 2023, most of Russia's fuel oil and VGO have been redirected to other regions, particularly Asia. In April 2024, direct shipments of fuel oil and VGO from Russian ports to India rose to 0.6 million metric tons from 0.4 million tons in the prior month. Conversely, fuel oil loadings to China decreased to about 450,000 tons from 660,000 tons in March. Traders noted that both China and India import straight-run fuel oil and VGO for refining, partly substituting costlier Urals barrels. Fuel oil supplies to Egypt surged in April to nearly 0.5 million tons from 0.1 million tons in March, with all cargoes being discharged at Ain Sukhna Terminal, according to shipping data. This terminal serves as storage and blending facilities for traders, who procure fuel oil for power generation ahead of the summer season. In May, approximately 200,000 tons of fuel oil had been loaded in Russian ports to cater to the Ain Sukhna Terminal, according to LSEG data. Moreover, Russian VGO and fuel oil loadings to Fujairah spiked in April to about 260,000 tons from 60,000 tons in March. However, fuel oil supplies from Russia to Senegal dropped last month to about 100,000 tons from 310,000 tons in March, while loadings to Saudi Arabia decreased to 200,000 tons compared to 490,000 tons previously, according to shipping data. Additionally, around 300,000 tons of VGO and fuel oil loaded in Russian ports in April were designated for ship-to-ship transfers near Greece and Malta. Most of these cargoes eventually find their way to Asia, according to market sources.
