Russia Turns to India for Fuel Supplies

Russia has started importing fuels from India, with one cargo of 42,000 tons of gasoline from Nayara Energy’s Vadinar refinery arriving in Russia earlier this month, according to Kpler data. The Vadinar refinery is partly owned by Rosneft, which supplies the crude oil that is processed at the facility. Those shipments were disrupted last November, after the United States sanctioned Russia’s largest oil exporter.

The Vadinar cargo was loaded in mid-June on a Russian-flagged tanker and was then shipped to Egypt, where it was transferred to an Omani-flagged fuel carrier and sent to Russia, where it arrived on August 5. This shipment highlights the severity of the current domestic petrol imbalance in Russia.

Russia’s Refinery Crisis

Rosneft‘s involvement in the Vadinar refinery is notable, as it shows the company’s efforts to secure fuel supplies amid the refinery crisis. The crisis has led to a significant decrease in Russia’s refinery runs, with estimates suggesting that they stood at 3.6 million barrels daily in July, over 30% lower than the seasonal average.

According to Kpler lead analyst Sumit Ritolia, the emergence of Indian barrels is particularly notable, as it highlights the extent to which lower refinery runs are reshaping Russia’s traditional product trade flows.

Impact on Oil Exports

Russia’s seaborne crude exports fell to their lowest level since May last month, as recovering refinery runs pulled barrels back into domestic processing, while Ukrainian drone attacks disrupted loading at key ports. The country shipped 3.71 million barrels per day in the four weeks through August 9, according to vessel-tracking data compiled by Bloomberg.

However, shipments averaged just 3.25 million barrels daily in the latest week, down from 3.5 million barrels daily a week earlier.

Fuel Crunch and Diesel Exports

The fuel crunch resulting from the refinery attacks is sending a ripple effect across markets, as Russia banned diesel exports earlier this year to secure more supply for the domestic market amid the drone strikes. This ban was recently extended until the end of the year.

Russia banned diesel exports earlier this year to secure more supply for the domestic market amid the drone strikes, which aggravated a supply tightening caused by refinery damages in the Middle East and the closure of the Strait of Hormuz. That ban was recently extended until the end of the year. By Irina Slav for Oilprice.com