India, Egypt top destinations for Russian seaborne fuel oil, VGO exports in April, LSEG data shows
India and Egypt were the top destinations for Russian seaborne fuel oil and vacuum gasoil exports in April, traders said and LSEG data showed. In total, Russian fuel oil and VGO seaborne exports fell in April by 10% month-on-month to about 3.32 million tons, as refining capacity idled due to maintenance, technical outages and drone attacks, increased last month by 13.6% from March, Reuters calculations showed. The European Union’s full embargo on Russian oil products went into effect in February 2023 and the bulk of Russia’s fuel oil and VGO was redirected to other regions, mostly Asia. In April 2024, direct fuel oil and VGO shipments from Russian ports to India increased to 0.6 million metric tons from 0.4 million tons the previous month. Russian fuel oil loadings to China decreased last month to about 450,000 tons from 660,000 tons in March, according to LSEG data and Reuters’ calculations. China and India import straight-run fuel oil and VGO for refining, partially replacing more expensive Urals barrels, traders said. Fuel oil supplies to Egypt increased in April to almost 0.5 million tons from 0.1 million tons in the previous month. All the cargoes were discharged at Ain Sukhna Terminal, shipping data showed. Traders use Ain Sukhna Terminal as storage and blending facilities, buying fuel oil for power generation ahead of the summer season, market sources said. At least 200,000 tons of fuel oil had been loaded in Russian ports so far in May to supply the Ain Sukhna Terminal, according to LSEG data. Russian VGO and fuel oil loadings to Fujairah increased in April to about 260,000 tons from 60,000 tons in March.
India’s use of crude tankers to export diesel slows in May
Indian refiners’ use of crude oil vessels to ship refined fuels such as diesel to key European markets has diminished in May after volumes neared two-year high levels last month, trade sources and analysts said. That is because rising inventories in the Antwerp-Rotterdam-Amsterdam region and shaky east-west diesel price spreads undermine the case for sellers to ship large volumes of the industrial fuel West. While more April shipments from India to Europe provided a floor for Asian margins, fewer such voyages in May will likely compel Indian refiners to shift diesel sales back to Asia, exacerbating a supply glut in the region, analysts and traders said. Diesel exports using Suezmax and Aframax vessels Mesta, Pertamina Halmahera and Marlin Santorini – mostly from Reliance Industries’ Jamnagar refinery – reached a near two-year high of around 380,000 metric tons (2.831 million barrels) in April, Kpler, Vortexa and LSEG shiptracking data showed. Reliance did not respond to a Reuters email for comment. Shiptracker Kpler in February estimated a switch by 35 Aframax crude tankers to carry refined products instead of crude. Traders switched to using Suezmax and Aframax tankers – that typically load so-called “dirty” crude oil and residue fuel – for carrying “clean” refined products after freight rates for long-range (LR) tankers spiked following Houthi attacks on ships in the Red Sea that forced longer voyages and tightened vessel availability. “At the time it was a reflection of how tight the LR1 and LR2 clean product tanker market was given the additional tonne miles vessels were having to do to avoid the Red Sea, and the lack of available prompt tonnage to book because ships were massively displaced given the additional sail times,” said Wood Mackenzie’s research analyst Emma Howsham. The crude oil market was also weaker, as refinery maintenance in the United States and Middle East dented demand for dirty vessels, making it attractive to ship diesel using them, she added. Even after the cost for scrubbing and cleaning a vessel to load ultra-low sulphur diesel, that was still nearly twice the cost for shipping up to 130,000 tons of fuel on a Suezmax vessel on a similar route, traders said. Traders have been among the biggest shippers of Indian-origin diesel, and they have the option for several discharge destinations and thus have room to ship using bigger vessels, one Europe-based trade source said. The trend has abated for May with no dirty tankers carrying diesel on the India-northwest Europe route, shiptracking data showed, as analysts expect Europe’s supply to be long. The economics for Indian refiners to supply to Europe via the Cape of Good Hope looks challenging as “European supply looks ample in the coming months”, said Woodmac’s Howsham.
GAIL To Set Up 26 Bio CNG Plants In JV Partnership
State-owned GAIL (India) Ltd. plans to set up around 26 Bio CNG plants over the next two to three years, both as producers as well as joint venture partners with raw material suppliers or biogas producers. The company has issued an Expression of Interest across India, for companies qualifying with certain parameters to form joint ventures for raw materials such as paddy straw, municipal solid waste and sugarcane press muds. The company alongwith joint venture partners is likely to invest up to Rs 13 billion, including equity contributions of 30%. Earlier, in February, Gail announced plans to import ethane from ethane-surplus countries to be transported through its pipeline systems to demand centres.