Diesel exports from vital Russian port to plunge 30% in May

Diesel exports out of Russia’s main port for the fuel are set to plunge by about 30% next month, as the effects of the country’s war in Ukraine ripple through energy markets.

Shipments from Primorsk on the Baltic Sea are set at 1.1 million tons for May—about 269,000 barrels a day, the lowest level since September—according to a loading plan seen by Bloomberg.

It’s the single biggest monthly decline since at least late 2016 in data based on loading schedules. It’s also the lowest volume for any May since 2019.

The loading program matters because European diesel margins have surged following Russia’s invasion of Ukraine, and Primorsk is a key part of the supply-chain network for the fuel. Last year, more than 96% of diesel shipped out of the Baltic port was discharged into Europe, according to Vortexa Ltd. data compiled by Bloomberg.

Since the war erupted in February, many energy companies have shunned Russian oil supplies amid an evolving list of international sanctions targeting Moscow.

“This will undoubtedly add pressure to a diesel market that was already very tight,” said Jonathan Leitch, an oil analyst at Turner, Mason & Co. “The problem is that sanctions or self-sanctioning means that even these published volumes may not be available to Europe, meaning that importers will have a bigger gap to fill to meet European demand.”

Diesel loadings from Primorsk have fallen month-on-month in May for the last five years at least, but never so dramatically. The port is by far Russia’s largest for exports of the fuel. Combined shipments from Novorossiysk and Tuapse on the Black Sea last year were slightly below Primorsk’s 16.76 million tons, according to Vortexa data.