Russian diesel rebound lifts fuel exports as refineries return

A jump in diesel exports helped Russia’s shipments of refined fuels grow slightly last month as local refineries returned from maintenance.

Traders are analyzing flows for signs of whether Russia is sticking fully to a pledge to cut output by 500,000 barrels a day. That’s been difficult to do as Moscow keeps production data a state secret, and so far the nation has dragged its heels on cutbacks as it faces pressure to keep funds flowing amid its war in Ukraine.

Russia’s refined fuel cargoes rose by 88,000 barrels a day in June, recovering from a seven-month low, according to data compiled by Bloomberg from analytics firm Vortexa Ltd. The rebound came as refinery units returned from spring maintenance. Separate data also show that Russia’s seaborne crude oil flows rose sharply last week.

Group of Seven sanctions mean Russian fuel exports are subject to price caps at two levels. Shipments of products capped at the higher $100-a-barrel price gained last month, with flows of diesel or gasoil up 40% from May. Exports of fuel oil edged up, while those of fuels such as naphtha — a petrochemical feedstock used in plastics and gasoline blending — saw sharp declines. 

Here’s a breakdown of June exports:

Shipments of diesel and gasoil rebounded to a three-month high of 1.2 million barrels a day. The bulk of cargoes are yet to reach their destination, but most of the nation’s diesel has been going to Africa, South America and the Middle East since the European Union barred all seaborne imports from Russia in February.

Flows of gasoline and blending components — a relatively small portion of overall fuel exports — slid 40% to the lowest since September 2021. The government is considering imposing quotas on exports of the car fuel amid local price spikes. Jet fuel exports more than halved from May’s level.

Naphtha exports slumped 34% to 318,000 barrels a day, the lowest monthly total in Vortexa data since the start of 2016. Russia’s flows of the feedstock to Asia have soared since the EU ban, weighing on prices in the East.

Exports of Russian refinery feedstocks, used in secondary refining units to make other fuels, dropped to a four-month low. Fuel oil shipments edged up by roughly 5% to more than 700,000 barrels a day, with most cargoes heading to Asia and the Middle East.

Export volumes may get revised as new shipping data is received.